Central Bank (Mortgage Interest Rates) Bill 2015: Second Stage [Private Members]

I move: "That the Bill be now read a Second Time."

I am very happy to have the opportunity to bring the Bill before the House this evening. It deals with an issue of major social importance, which is a political and economic problem also. The Bill deserves the support of all sides of the House which can play a part in righting a wrong. The Bill would empower the Central Bank to act in the public interest, taking into account economic considerations to set a cap on standard variable rates in the banks bailed out by the people. Recent research from the Central Bank, and the hundreds and thousands of people who contacted our offices in recent months and years, confirm a rip-off is taking place. It shows Irish standard variable rates are way above the EU average. The research shows the average outstanding standard variable rate in Ireland is 4.24% compared to an EU median mortgage rate of 2.8%. The interest rate for new mortgages in Ireland at 4.26% is the highest of all the countries analysed. In Britain, the effective rate is only 2.01% and the eurozone average is 2.1%. In Ireland, it is a staggering 3.42%.

We do not have a functioning market and pretending we do serves no purpose. I note the Minister has left his options open on this question. He has insisted that, "The issue of a penal banking levy in the Budget or powers for the Central Banks to regulate interest rates will be considered at that time if sufficient progress is not made". These are fine sentiments but it is not like this issue has suddenly popped up out of nowhere. For years the Government has been told of this issue. Four years ago, when the Government still spoke of things like democratic revolutions, the then Tánaiste, Deputy Eamon Gilmore, told my colleague, Deputy Doherty, that he need be in no doubt that the Government would act decisively, forcefully and effectively with the banks. This sounds so ridiculous now, after four years of rule by the banks for the banks.

I hope this evening the Government will finally abandon its policy of trusting the banks. Surely at this stage the penny has dropped that the banks are not looking after the people. They are failing society in many ways and need to be brought into line. Talking to the banks does not work. Appealing to their humanity and moral duty does not work. The Government's failure on mortgage arrears, on bankers' pay and on making the banks play ball on insolvency cases is well documented. Its approach is always the same and it always fails. It always put the banks first, and in return the banks pocket the gains and make new demands. This vicious circle of bank rule must end.

The Bill is a measured and appropriate response. It is a major step to take. It is an extraordinary move for extraordinary times. We cannot go on pretending we have a functioning banking system. The market is failing the people and intervention is needed to restore a functioning and fair system. The Bill is short and is designed to lapse by December 2017. This will bring us to almost a decade after the banking crisis began. The criteria proposed on which the Central Bank would make its decision on whether to introduce a cap and at what rate to set this cap are set out in section 2. The range of criteria allows for a balanced view taking into account economic and social factors. The Central Bank would consider the current rate and any justification for this a bank might offer, the ECB rate, the profitability and viability of the bank concerned and, crucially, the impact of current rates on mortgage holders.

Section 3 outlines how any direction on a mortgage cap would be in force for 12 months unless renewed. It would also allow a bank to seek the setting aside of the decision after six months if it could make a case for so doing. The nature of any cap imposed would be a maximum rate, allowing for a bank to decrease it further if it wishes. The Central Bank would give each bank affected a report outlining why it had chosen to act.

Section 4 deals with the relationship between the Minister of the day and the Central Bank. The Central Bank would each year report on the use of this power to the Minister. Additionally, the Minister could seek interim reports on the use or failure to use this power. In this way we believe public concern could be brought to bear on the Central Bank through the Minister while respecting the independence of the Central Bank.

Section 5 would allow the Minister to set down regulations on how these reviews would be carried out, including timeframes for submissions, decisions and implementation. Section 6 would make it an offence for persons not to comply with a direction made by the Central Bank under the Bill. We all know the Government's approach of threatening levies does not scare the banks. They know extra levies or charges can be passed on to the customer. Section 7 deals with the commencement date and includes a clause whereby the Bill would cease to have effect from 31 December 2017.

There are always arguments for doing nothing or hoping things get better by themselves, but there are times when we have to accept that some problems are not going to sort themselves out and that action is justified if taken in a considered and proportionate way. I note the concerns expressed by the Central Bank that it does not want these powers. At a recent meeting of the Joint Committee on Finance, Public Expenditure and Reform, the Governor of the Central Bank, Professor Honohan, raised a couple of objections to the principles behind the Bill. It is worth nothing his comments in a full way. He said among other things that "none of the banks has so far provided what I would regard as a clear and quantified statement of their policy with respect to adjustments of the standard variable interest rate " and "Nonetheless, I would welcome a reduction in bank standard variable rates in current circumstances as a benefit to the economy at large". The concerns he expressed are valid for a man in his position, but I believe the approach taken in the Bill negates much of the logic behind his objections. For example, he says that in the medium term such a move could have a negative chill effect on new competitors weighing up the option of entering the market.

I understand that logic, but by limiting this Bill in its timeframe and limiting it to the covered institutions I believe many of those concerns have been addressed. Fundamentally, doing nothing has failed and is no longer an option. This Bill is not diving in head first - it is simply dipping a toe in the water.

I understand too that some will be unsure about why the Bill is limited to the covered institutions. These are the banks which the people bailed out. They are at least part-owned by the people as a result. The mandate that gives to the Government to act on the people's behalf is significant. It is understood, too, that between them these three banks account for at least 80% of the mortgage market. At its most basic, my argument is that it is time the banks started playing a role in the economic and social regeneration of this country. God knows they have taken enough.

Separately, we have put on record our belief that the Financial Services Ombudsman has taken far too conservative an approach to the powers available to him and that there is more scope for that body to be fighting for mortgage holders who find themselves paying over the odds on their mortgage rates.

I urge all parties to support this Bill. It is an issue of direct relevance to hundreds of thousands of families across this State. We are now at a point at which, after many, many years of brutal, counterproductive and ultimately failed austerity, we have a State with a massive interest in the banking sector. We have a market failure, meaning that the cost of standard variable mortgages to most families is out of sync with the rest of Europe and with normal market laws.

When we look coldly and objectively at two facts, it is inconceivable that the State would not move to use its influence at those banks it owns to make it possible to bring rates down. It makes sense at this point of our economic development to act in the people's interest, finally. There is no reason to delay, no reason to give more time and no reason to be satisfied with some banks' indication that they will reduce rates by the bare minimum.

I am calling on the Government and all other parties to support this Bill and to move swiftly to implement it. The hundreds of thousands of customers at banks owned by the people and bailed out by the people deserve no less. The rip-off must end.

Tá an Rialtas seo ag teacht chun deiridh, agus deireadh fiáin atá ann. Tá sé ag titim ó ghéarchéim go géarchéim. An fáth go bhfuil sé faoi bhrú ná nach bhfuil sé ag tabhairt airde ar chor ar bith ar mhuintir na tíre. Tá teip uafásach déanta mar gheall ar fhiachas na ndaoine agus fiachas gnóthaí thar timpeall na tíre. Tá sé sin i gcodarsnacht mhór leis an tslí ina bhfuil an Rialtas ag plé le IBRC agus le comhlachtaí móra saibhre freisin.

When I first came into this Chamber, I said that if the Government continued on the path on which it had started, it would be the author of a lost decade, and that is what we seem to have. We are eight years into a disaster affecting tens of thousands of families. A home is very important. If a family does not have its own home that is warm, comfortable and safe, very little else will work for it. Education, health and mental health are determined according to one's ability to be in a safe, warm home. The fact that the Government has not made this a priority is a disgrace.

On my books at the moment are approximately 150 families in mortgage distress. One individual from County Meath had bought a house in Foxford to which he was going to move, but the collapse happened and the bank forcibly sold the house after just four months and €2,000 of arrears. On the basis of that, he was left with a debt of €80,000. I know a woman who has just gone through a separation. She has three kids and has an extreme bout of cancer at the moment, and she is also likely to lose her home. I know of a family which has just lost its home. They applied for emergency accommodation and were told they would have to wait seven weeks just to get onto the emergency accommodation process and then, maybe, get into a hotel room or a bed and breakfast. When they ask what they are to do they are told, "Find somewhere to live." They are not alone. There are hundreds of people going through this level of damage in my county on a daily basis and tens of thousands throughout the State. The worry I have is that the Government sees these individuals in a completely different light from the large benefactors of their political parties, against whom we hear allegations in this Chamber day in, day out but who have received debt and capital write-downs. None of these things seems to happen for the average punter. In the case of IBRC, we know of 18,000 mortgage holders whose loans were sold to vulture funds with no talk of a write-down of capital or a reduction in the interest rate. These people are not even entitled to full regulation under the law, which is incredible.

Businesses are also suffering debt distress and there is not a business organisation in the country which does not deal, day in, day out, with debt distress and the legacy debt which exists within companies. Many businesses, having made it through the disaster of this Government, are now faced with a situation in which they have a millstone of debt in their business and the likelihood of their growing, employing people or adding to the economy in any way is held back because of the austere nature of the Government and the banks. If we were to reduce interest rates for mortgage holders, it would have a significant effect on the number of people in mortgage distress. Straight away we would bring down the number of people in mortgage distress and make mortgages achievable for families. The question is one of intent and whether the Government has the desire to do that. It is plain that Fine Gael does not have that desire, but there would have been an expectation that the Labour Party would have this as an objective, particularly through its housing sector policies. I appeal to the Minister of State, Deputy Kathleen Lynch, in the week in which an investigation is being held into low interest rates for large business people, to support the right of Irish citizens to an affordable interest rate as put forward in our Bill.

Let me refer the Minister and the Government to the reality of this situation. Back in February of this year, it took Donegal's county registrar two hours and 29 minutes just to do a call-over of the motions list at Letterkenny courthouse - two hours and 29 minutes. That day, there were some 271 people facing repossession in just one court sitting in a Donegal court. The people affected by this crisis are ordinary people. They are constituents whom the Minister and I deal with every week.

As my colleagues have alluded to already, a total of 351 homes have been repossessed or surrendered in this State during the first quarter of 2015 alone. These are ordinary people, kicked from their homes directly into hostels or other emergency accommodation and a homeless system that is not fit for purpose. What is happening to the mortgage holders of this State is scandalous.

We have a situation in which banks, which came crawling with outstretched hands when they needed bailing out, are now failing the very people who were forced to do that bailing. The lack of gratitude is sickening. What is even more sickening is the Government's lack of initiative and its reluctance to embrace the change that is needed to solve this crisis for fear of upsetting the status quo as laid down by the banks.

In March of this year, the Minister for Finance had the gall to say that figures published by The Irish Times on home repossessions were a reflection of banks using the courts to force homeowners to engage with them rather actually repossessing houses. What sort of system is that for the Government and Central Bank to stand over? These are homeowners who have found themselves in dire straits. They deserve help, not intimidation. However, what we see is the banks ruling and the Government doing their bidding.

Sinn Féin is providing a real, credible solution. It is a solution that provides the control that is needed to stop the continuous downward spiral. This is a solution that can have an immediate effect on lives filled with worry and fear - those people who face sleepless nights wondering whether a letter taking the roof from over their heads will be slipped through the letter box in the morning. For the first time, here is a Bill to provide for a legal process whereby the regulator can set a cap on the standard variable rate that the covered institutions can charge. The Minister for Finance would be able to prod the regulator to undertake a review, which could lead to a rate being set. He could ask for reports on the use of these powers and make regulations on how they can be used. It is a solution that gives the Minister and the Central Bank the real power to deal with this crisis.

It is also a Bill designed for where we are today. Any cap to rates will lapse after 12 months unless the regulator renews it. After six months, a bank can make an appeal, which the regulator must consider. The legislation as a whole is designed to lapse at the end of 2017. This Bill is an extraordinary measure for extraordinary times. As my colleagues have all said, we cannot go on pretending we live in a normal banking environment. The banking sector is still a major drain on the economy. The banks must start playing their part in creating a fair recovery and the Government must, if needs be, have the power to make sure they do this.

We cannot wait, as has been suggested by the Government, until the budget to deal with this crisis. The banks are ripping off mortgage holders, and inaction is not an option. I urge the Minister to reconsider his position and to have the decency to help those mortgage holders who are in trouble by making the banks fulfil their moral obligation to give something back. I am mindful that all those ordinary people, the hundreds who have gone before the courts in deep distress, are observing the situation with IBRC and Siteserv and the deals that are done for the wealthiest people in this State. They must be asking themselves, "What in God's name is happening? Have we learned the lessons of the crisis that brought this State to its knees?".

The aim of this Bill is simple: that the Central Bank be given the power to impose a cap on variable mortgage interest rates. We know that the rates currently applied by some banks in Ireland are among the highest across Europe. All the while, the Irish public has had to cough up further taxes and charges, including double taxation of water. At the same time, the Government has reduced supports and services across the board. Despite this reality for citizens, with financial worry leading to ill health and in some cases to tragic consequences, this Government has failed to exert any influence of substance on the banks.

Those who say this Bill would give too much power to the Minister and the Central Bank must remember that the measures are limited by time. The legislation as a whole is designed to lapse at the end of 2017. Banks can also apply for a review after six months. This would cover eventualities in which the cost of borrowing by the bank increases. We recognise that the adoption of this Bill would require a change of direction for the current Government, but anything that switches the balance of for-profit finance back in the direction of the populace at large is a positive measure. There are also measures in place that would ensure this could only be applied where the Central Bank has examined several factors, including the profit level and size of the bank, along with its interest rates and ECB interest rates.

For the first time, this Bill would introduce a legal process whereby the regulator would have the power to set a cap on the standard variable rate that the covered institutions can charge. The Minister for Finance would be able to ask the regulator to undertake a review which could lead to a rate being set. The regulator would decide whether a cap was to be set after an analysis of the bank.

Why is it specifically AIB, Bank of Ireland and Permanent TSB? They hold the vast majority of mortgage accounts that are in arrears. Also, these banks would not exist today if the Irish people had not bailed them out. These three banks are partly or fully State-owned. The Governor of the Central Bank, Professor Honohan, has himself stated that he feels a cut in the standard variable rate would benefit the economy at large. The current Government has been too beholden to financial institutes and gambling individuals, often forgetting the very real and tangible social effects of its decisions. This was evident in its continuation of Fianna Fáil cutbacks, and it is evident once again in its failure to lead a fair recovery.

We need to ensure that mortgage holders are given a fair chance of repaying their borrowings at a reasonable rate. We need to address the current situation in which a lack of competition has had the effect of maintaining artificially inflated rates. Those with distressed mortgages, estimated at 100,000 people, have been left high and dry by this Government. It is now time to act, and this Bill provides the means.

While the Government may have talked the talk about asking the banks to pass on the ECB interest rate cut to struggling mortgage holders, it has failed to achieve much. When push came to shove, it did nothing. What have the public interest directors on their boards done? They have done little, if anything. I ask the Minister of State to outline how she sees such directors optimally taking a part in such issues.

Deir an Rialtas gur thriail sé labhairt leis na bainc ach nár tugadh cluas éisteachta dó. Tá tráth na cainte leis an dream sin a chruthaigh pian agus peannaid d'iliomad daoine timpeall na tíre thart. Rialtas maith é Rialtas a thabharfadh ceannaireacht agus a chinnteodh athshlánú cothrom don tír.

The days of talking to the banking institutions, which through their greed have caused suffering the length and breadth of this country, are over. We need to see a clear affirmation of who is actually in charge - those elected by the people of this State, or the bankers who have only profit as a goal. Fine Gael and the Labour Party will tell us that by supporting or not supporting this Bill, as the case may be.

Tá sé tábhachtach go bhfuilimid ag labhairt faoin gceist seo mar tá sé ag déanamh tinnis do dhaoine le blianta anuas cé chomh hard is atá an ráta úis sa tír seo, go háirithe rátaí úis na mbanc atá faoi smacht an Rialtais, agus go bhfuil siadsan ag íoc rátaí níos airde ná mar is gnách ar mhorgáistí a ghlac roinnt acu le déanaí agus roinnt eile acu roimh an crash a tharla cúpla bliain ó shin. Séard atá i gceist againn ná déileáil leis an bhfadhb atá ann mar go bhfuil ráta úis á gearradh ar dhaoine sa tír seo atá go minic 1.5% nó 2% níos airde ná mar atá sé i Sasana ná san Aontas Eorpach i gcoitinne. Séard is brí leis sin ná go bhfuil níos lú airgid ag daoine gach uile sheachtain nó gach uile mhí agus is suim mhór airgid atá i gceist.

Mar shampla, laghdaigh mo bhanc an ráta úis ar mo mhorgáiste an mhí seo caite 0.25% nó beagán sa bhreis ar sin. Is buntáiste domsa de €30 nó €40 sa mhí nó sa tseachtain é. Is suim mhór airgid é sin domsa ach is suim mhór mhillteach í do ghnáthdhaoine atá ar an ngannchuid, atá i gcruachás maidir le morgáiste. Mar a dúirt mé, ní raibh ach 0.3% i gceist. Má mhéadaítear é sin thar bhliain iomlán suas go dtí an figiúir go mba chóir go mbeadh sé de réir an mheáin san Eoraip, bheadh beagnach €2,000 sa bhliain níos mó ag gnáthphobal na tíre. Chaithfeadh siadsan é ar ghnáthrudaí don teach den chuid is mó. Ní bheadh siad i sáinn chomh mór is a bhfuil go leor acu faoi láthair agus ní bheadh siad ag brath ar an Stát chun cuidiú leo. Chaithfeadh siad an t-airgead sa gheilleagar áitiúil, áit nach bhfuil sé faoi láthair toisc go bhfuil siad i gcruachás agus toisc go bhfuil na bainc á robáil.

Is é sin an príomhrud gur chóir dúinn déileáil leis amach anseo. Ba chóir go mbeadh an fhadhb réitithe ag an Rialtas seo cheana ach tá teip iomlán air mar tá teip iomlán air. Tá gnáthphobal na tíre seo, nó go leor acu, sásta an morgáiste agus na hiasachtaí atá acu a íoc agus tá siad tar éis iad a íoc in ainneoin nach raibh siad in ann bia a chur ar an mbord nó íoc as scolaíocht agus go raibh cruachás eile ina saolta. Bhí siad chun é seo a dhéanamh toisc go raibh siad ag iarraidh déanamh cinnte de go raibh dídean acu agus ag a bpáistí agus gur chonaic siad nach raibh an dara rogha acu toisc nach raibh an Rialtas seo, ná an Rialtas roimhe, sásta infheistíocht cheart a dhéanamh ar thithíocht shóisialta. Chomh maith leis sin, feiceann siad go bhfuil cíosanna ag ardú sna tithe timpeall orthu le dhá bhliain anuas. Tá cruachás ann agus tá roinnt den locht ar an Rialtas seo.

Ní gá dúinn ach smaoineamh siar ar ráiteas an Teachta Gilmore nuair a bhí sé ina cheannaire ar Pháirtí an Lucht Oibre agus ina Thánaiste. Dúirt seisean leis an Teachta Pearse Doherty, a chur an Bhille seo le chéile, "Deputy Doherty need be in no doubt that this Government will act decisively, forcefully and effectively with the banks". Ní dhearna an Rialtas é sin sa bhliain sin, 2011, agus ní dhearna sé é ó shin. Níl sé sásta fós é sin a dhéanamh. Mar sin, táim ag impí ar an Aire ní hamháin tacú leis an mBille seo ach déanamh cinnte freisin go ndéanfar gníomh de réir briathar an Teachta Gilmore. Is linne na bainc seo. Ní chóir go mbeadh fadhb ann ach is é an fhadhb ná nach bhfuil an Rialtas sásta seasamh in éadan na mbanc agus go bhfuil sé sásta ualach breise a chur orthu siúd atá morgáistí acu sna bainc Stáit seo.

Ní hamháin gur íoc muid as na bainc seo trí airgead an Stáit ar fad a chur isteach i ráthaíocht do na banc agus iarracht a dhéanamh tarrtháil a dhéanamh orthu, ach anois tá an Rialtas ag iarraidh orthu siúd atá morgáiste acu íoc sa bhreis ar an ngnáthráta úis agus tá orthu siúd atá ag déanamh gnáthbhaincéireacht leis na bainc sin táillí a íoc nach raibh orthu a íoc roimhe sin. In 2009, sular glacadh EBS faoi sheilbh an Stáit tríd é a chur isteach in AIB, ní raibh aon táillí ar an ngnáthdhuine a raibh cuntas aige nó aici. Anois tá orthu táillí a íoc agus tá orthu ús breise a íoc má tá morgáiste acu cé go bhfuilimid tar éis é a íoc cheana féin.

Tá an Rialtas ag cur an ualaigh ar fad ar ghnáthphobal na tíre in áit é a chur orthu siúd a mba chóir go mbeadh sé orthu. Is é sin le rá, na sealbhóirí bannaí sóisearacha agus fiú, mar a dúirt Páirtí an Lucht Oibre roimhe sin, na sealbhóirí bannaí sinsearacha, ach ní raibh siad sásta glacadh leis sin. Rinne an Rialtas praiseach de. Mar sin, táimid ag iarraidh orthu ar a laghad glacadh leis an reachtaíocht seo chun déanamh cinnte de go mbeidh airgead breise i bpócaí na ndaoine atá morgáistí acu amach anseo.

Ní leor a rá, mar a dúirt an tAire, an Teachta Noonan, gur féidir linn fanacht cúpla mí agus go ndéileáilfimid leis ag am an bhuiséid. Sin cúig mhí breise ag íoc 2% níos mó ná mar a chóir go mbeadh daoine ag íoc do go leor daoine sa Stát. Is am thar an gnách atá i gceist againn anseo. Ghlac an Rialtas seo agus an Rialtas roimhe cheana gur am thar an gnách é agus thóg sé isteach reachtaíocht éigeandála a ghoid tuarastal daoine, a laghdaigh na huaireanta a bhí acu, agus a ghearr na seirbhísí a bhí ar fáil do ghnáthcháiníocóirí an Stáit. Chuir sé breis cánach ar ghnáthphobal na tíre ach ní raibh sé sásta bogadh i gcoinne na mbanc seo chun déanamh cinnte go raibh airgead i bpócaí an ghnáthdhuine agus airgead á chaitheamh i ngnáthgheilleagar ceantar aitiúla.

Sin an méid atá á lorg againn anseo: go nglacfar leis go bhfuil éigeandáil i gceist, nach bhfuil na bainc ag déileáil le gnáthphobal na tíre go cothrom, gur chóir go mbeadh an Stát ag déanamh cinnte de go bhfuil sé sin brúite orthu ar feadh 12 mhí ar a laghad agus go mbeadh orainn teacht ar ais go dtí an Teach seo i gceann bliana chun a rá ar chóir dúinn leanúint leis seo toisc nach bhfuil de bhéasa ag na bainc déileáil leis an bpobal mar ba chóir.

Is sort léiriú é gur ghá dúinn é seo a dhéanamh ar fhadhbanna an chaipitleachas ina iomlán. Tá fadhb ann nuair nach féidir leis an Stát déileáil leis an margadh nó a ladar a chur isteach sa mhargadh, nó nuair a chreideann daoine, ar an taobh sin den Teach ach go háirithe, nár chóir dó é sin a dhéanamh. Measaim féin gur chóir don Stát seasamh isteach i gcónaí agus tacú le gnáthphobal na tíre i gcoinne na bainc nó na buic mhóra sa tír seo. Sin í an difríocht idir mise agus iad siúd ar an taobh eile den Teach. Níl sé sin déanta ag an Rialtas seo go dtí seo agus tá fíorbheagán ama fágtha aige. Táim ag impí air inniu an chéad chéim a thógáil maidir leis na bainc agus déanamh cinnte de go bhfuil an Stát ag seasamh le gnáthphobal na tíre agus nach bhfuil sé ag seasamh leis na buic mhóra agus déanamh cinnte freisin go bhfuil airgead breise ag gnáthphobal na tíre. Caithfidh siad sa tír seo é. Ní bheidh siad ag dul thar lear. Ní bheidh siad ar nós na buic mhóra sa tír seo. Ní chuirfidh siad an t-airgead sin isteach i dtithe thar lear. Caithfear é ar ghnáthtithe agus i ngnáthshiopaí sa tír seo agus beidh buntáiste ansin do ghnáthgheilleagair na tíre agus don tsochaí ar fad, seachas an gnáthchéim atá tógtha ag an Stát go dtí seo, is é sin le rá, neamhaird a thabhairt do gheilleagair áitiúla.

I am speaking on behalf of the Minister for Finance, who unfortunately cannot be here. On his behalf, I thank Deputy Pearse Doherty for proposing this Bill on an important issue. The Minister for Finance appreciates the concerns the Deputy has attempted to address in this Bill. The Government considers this to be a very serious issue, which is why the Minister asked the Central Bank to examine this issue and met the six main mortgage banks to discuss the banks' plans to reduce mortgage payments. The Minister has made it clear that the issue of a penal banking levy in the budget or powers for the Central Bank to regulate interest rates will be considered at a later stage if sufficient progress is not made.

This Bill requires the Central Bank to consider whether it is necessary to review the interest rates charged on mortgages and gives it the power to issue a direction to a covered institution to vary its mortgage interest rate. It also gives the Central Bank power to set a maximum interest rate ceiling. The Bill puts forward some of the considerations that the Central Bank must take into account in this review.

The Government is opposing this Bill, and I will outline the reasons it cannot be accepted.

There may also be legal issues regarding definitions in the Bill, but I do not propose spending significant time on them, since the Bill is being opposed. The specific reference to interest rates that reflect market conditions could result in the exclusion of mortgages that use different wording to describe how and when rates change.

The Bill appears to propose two separate but overlapping powers for the Central Bank: to direct a variation in the level of interest under section 2(1) and to set a maximum rate of interest that may be charged under section 3(1). It is not clear why these are presented as separate powers or whether they are designed to apply in different circumstances.

It is worth drawing specific attention to the possibility that there could be issues of encroachment on the independence of the Central Bank. This would have to be considered, particularly in a European context. A major flaw in the Bill is that it restricts the power that it would give to the Central Bank to covered institutions only. Therefore, a significant number of borrowers' situations would not be addressed. It is a tenet of public policy that all borrowers should be treated equitably.

Deputy Pearse Doherty has attempted to avoid making a negative impact on competition in the mortgage sector by only allowing the Central Bank to issue directions in respect of the covered institutions that have benefitted from State support. However, by focusing solely on covered banks and standard variable rates, SVRs, it is not clear that the Bill would achieve the objective of reducing payments and it would not benefit customers in other banks or those on other products. New entrants or existing suppliers who are not covered would not be impacted.

There is no question but that the Minister shares the Deputy's concerns about the high SVR currently being charged by mortgage lenders. As the Deputy will be aware, the Minister met the senior management of Ireland's six main mortgage providers in May and strongly delivered the message that changes were expected. The meetings focused on the mortgage market and the comparatively high SVRs being charged. The banks agreed to review their rates and products and, by the beginning of July, which is in only a few weeks' time, to have simple options to reduce monthly mortgage payments for mortgage customers.

There is no one-size-fits-all offer and, in a competitive market, different banks will offer different products. Some of the potential products discussed include lower SVRs for existing and new customers, competitive fixed rate products and lower variable rates that take account of loan to value, LTV, ratios for new and existing customers. The need for greater competition in the market and how easy it is for customers to take up new products and switch between different institutions if they wish to avail of better rates were also discussed. Assurances were sought and received that home owners in negative equity would be able to avail of options to reduce their monthly payments.

Progress will be reviewed during the coming weeks and a follow-up set of meetings with each of the six banks will take place in September in advance of the budget. The issue of a penal bank levy in the budget or powers for the Central Bank to regulate interest rates will be considered at that time if sufficient progress has not been made. Bank of Ireland has announced cuts of up to 0.3% in its fixed mortgage interest rates available to new and existing customers. AIB has announced cuts of 0.25% for AIB SVR customers and 0.38% for EBS and Haven SVR customers. AIB also announced reductions in LTV and fixed-rate mortgages across AIB, EBS and Haven. These rate reductions will apply to new and existing customers.

It would not be appropriate to accept this legislation in advance of the date agreed with the banks by which they must have simple options in place to reduce the monthly mortgage payments of the hard-pressed households on SVRs. Senator Quinn initiated a Bill last month in this regard and Deputy Michael McGrath initiated a further Bill this week.

The Government is committed to helping to address the particular problems faced by those individuals who bought homes at the height of the property boom between 2004 and 2008. In this regard, in budget 2012 the Minister fulfilled the commitment in the programme for Government to increase the rate of mortgage interest relief to 30% for first-time buyers who took out their first mortgages in that period. This was the period during which house prices peaked. The 30% rate will continue to be applicable to those first-time buyers for the remaining years that mortgage interest relief continues to be available. In the absence of this change, the available mortgage interest relief would have gradually reduced to a rate of 15%.

The Government is firm in its belief that competition is the best way to achieve a sustainable long-term solution. The ESRI research note published today supports this view. It reads: "Overall, these results suggest that the most effective way for the continuing wedge between the different mortgage variable interest rates to be remedied is for a more efficient resolution of the mortgage arrears issue and greater competition within the domestic banking sector."

What has the Government done to foster competition? It introduced changes to section 149 of the Consumer Credit Act 1995 via the Central Bank (Supervision and Enforcement Act) 2013. This section regulates fees and charges and the changes mean that it does not apply for the first three years of operation of new entrants to the Irish banking sector. There is some evidence of improvements in the banking sector, with a number of institutions introducing new products and adapting their business models. In the past 12 months, there have been a number of new entrants to the mortgage market, bringing additional and welcome competition to the sector. Some new branches and hubs are opening in certain parts of the country, reflecting progress.

Competition is essential and banks will only respond in terms of pricing if they believe that they will lose customers otherwise. Professor Honohan, who has been much quoted tonight, stated that there might be 15,000 people who, if they had the time to do the sums, would save four-figure sums in one year by switching to a lower priced mortgage provider.

The ongoing mortgage arrears situation has had an impact on the SVRs charged by the banks. The Government is committed to helping people in arrears to reach sustainable solutions, and engagement between lenders and mortgage holders resulted in almost 115,000 solutions being found by the end of December. On 13 May, the Government announced a number of further measures to support mortgage holders who were in arrears. Building on actions previously taken, these measures aim to increase the supports available to people in arrears and the number of people availing of them. This package will reform the personal insolvency framework to give courts the power to review and, where appropriate, approve insolvency deals that have been rejected by creditors. The mortgage-to-rent scheme will also be expanded and made more accessible. It was also agreed that the Money Advice & Budgeting Service, MABS, would play a greater role in offering information, advice and assistance to borrowers in arrears.

In advance of the meetings that the Minister held with the main mortgage providers, the Central Bank, at his request, prepared a report on the influences on SVR pricing in Ireland. This report was submitted to the Department of Finance last month and has been published on its and the Central Bank's websites. The report provides a valuable insight into the mortgage market and I urge Deputies to read it carefully. It showed that 52%, or €60 billion, of credit advanced to Irish resident householders for home purchases was on a tracker rate, with a further 7%, or €8 billion, fixed and the remaining 41%, or €47 billion, on SVRs.

The report acknowledges that the spread between official ECB rates and the standard variable rate is relatively high, and lending rates are above average compared to European peers. However, it made clear that the high pricing of loans reflected three factors: credit risk, competition and bank profitability. The report went on to say that credit risk is influenced by the high level of non-performing loans and the lengthy and uncertain process of collateral recovery. Competition is weak. This is not unrelated to the credit risk, as new entrants may be deterred from entering the Irish market. Finally, bank profitability is constrained by legacy issues, but profitability is needed to build capital buffers and meet increasing regulatory requirements.

The report did note that the reduction in ECB policy rates has not been passed through fully to the funding costs of Irish banks. In addition, non-tracker mortgage lending rates have been slower to respond to a lowering of the policy rate than to increases. Furthermore, the Central Bank thought it was likely that the rates in effect for most banks at the end of April 2015 were higher than would be necessary in the long run for a bank unburdened by a poorly performing mortgage back book. The Central Bank has highlighted that the mortgage business as a whole is not profitable for Irish banks. This reflects the high level of non-performing loans and tracker mortgages on their books. The Central Bank suggested that the ability of the banks to partially compensate for the burden of trackers by retaining higher spreads on variable rates is likely to be transitory, as such spreads will in time encourage entry into the market. This report by the Central Bank sharply cautioned that any policy steps to interfere with the rates being charged risk creating damaging side-effects. Further research from the Central Bank can be expected over the coming months.

Another reason for opposing this Bill is that action such as that suggested in this Bill would be premature at this stage, given that there have already been moves in this area by AIB and Bank of Ireland to reduce rates. I have no intention of cheerleading for these. Obviously, we are waiting for moves from the other banks, but we have seen some progress already. There is no reason not to expect further developments in the near future. As I have said, the Minister is opposing this Bill because it is not the right time to act. He has set down clear deadlines with the banks. We are currently in the interim period, when such action is due to take place and has already taken place in the case of a number of providers. Furthermore, the Minister is opposing this Bill because he is taking account of the views of the Central Bank on whether it wants the power to regulate interest rates.

In relation to the regulation of the standard variable rate, in his introductory statement to the Joint Committee on Finance, Public Expenditure and Reform on 28 May last, the Governor of the Central Bank, Professor Patrick Honohan, re-emphasised his opposition to administrative control of interest rates. While he acknowledged that he would welcome a reduction in banks' SVR rates in current circumstances as a benefit to the economy at large, he said it remained his firm belief that the introduction of administrative controls on interest rates in Ireland would be bad for the country as a whole in the medium term, notably because of its "stultifying effect on bank efficiency and ... chilling effect on the entry of other banks". The Governor acknowledged that "since the crisis, banks' standard variable rates have moved higher than previously, relative to their cost of funds". He continued:

It is essential for the survival of banks that they achieve a sufficient return on the investment of funds, including equity, much of which, in our case, is owned by the Government. If not, they will not be able to achieve and maintain the growing requirement for capital adequacy in the years ahead. The profitability goal has to take account of long-term considerations, including the risks involved in lending, especially the actual and prospective losses on non-performing mortgage loans.

While the Governor signalled that he would "welcome a reduction in bank standard variable rates in current circumstances as a benefit to the economy at large," he said was opposed to this being brought about by "administrative control" and instead thought that competition would be the crucial determinant. The Minister has also highlighted the importance of competition in exerting downward pressure on interest rates, although it is acknowledged that this competition must be tempered by prudence. The Governor pointed out that in the current conditions, "the standard variable rate borrower’s main protection is competition: the fact that, by setting its standard variable rate too high, any bank stands to lose business, whether new business or switchers, to competitors". He acknowledged that the effectiveness of this strategy was currently hampered by the low level of competition in the Irish banking sector, while suggesting that this fact further strengthens arguments against administrative control of interest rates. He made it clear that ensuring "official policy does not inadvertently deter competition and entry of banks to the market is thus vital for the long-term health not only of banks, but of the economy". He warned that if Ireland were to be the country that controls interest rates, this would have a signalling value far in excess of what one might think in terms of causing a retreat of service providers.

The Governor firmly cautioned "against the enacting of legislation that would provide for officially administered lending rates". I have yet to see convincing evidence to justify going against this advice. He explicitly stated:

Nothing could be more likely to curtail and discourage entry of new competitors into Irish banking, and without the possibility of such entry, I cannot see that banking can recover the operational efficiency and competitive pricing that is essential for Ireland in the long run. For the sake of modestly lower SVRs for a few quarters, a much larger and quasi-permanent, albeit somewhat invisible loss, would be incurred by the customers of the banking system in Ireland. Well-capitalised banks operating more competitively will, in the end, offer lower rates and better service. [In addition] close administrative control of interest rates would not be easily compatible with the principle of an open market economy with free competition, which has underpinned the considerable increase in national prosperity over the past half century in Ireland, and which, of course, is enshrined in the European Union treaty. [The issue of administrative control] is not a matter to be taken lightly or [quickly] for what would clearly be at best a transitory advantage.

As Deputies are aware, banks must operate on a profitable basis if they are to provide the services necessary to the economy. Furthermore, this is necessary for banks to comply with international regulations surrounding capital requirements, to be fully financially autonomous and not dependent on the State, to have the resilience to deal with future shocks and to serve customers adequately.

The Minister has made it clear to the banks that the possible introduction of a penal banking levy in the budget or the possibility of giving the Central Bank the power to regulate interest rates will be considered at a later stage if sufficient progress is not made. The Central Bank does not want the power to regulate interest rates. In fact, it believes this power would be detrimental to the economy and the country at large. I think we should take the advice of Professor Honohan, who has served this country well. The Central Bank set out its position in relation to policy measures to administratively determine interest rates in a report it submitted to the Department of Finance on 11 May last. As I said earlier, this report, which has been published on the websites of both organisations, maintains that policy measures to administratively determine interest rates would be likely to have damaging side-effects. By discouraging entry, innovation and competition, such measures could result in higher lending margins and higher Exchequer costs over the longer term.

As recently as 28 May last, when he addressed the Joint Committee on Finance, Public Expenditure and Reform, the Governor of the Central Bank expressed his firm conviction that the introduction of administrative control on interest rates in Ireland would be bad for the country as a whole in the medium term. Furthermore, the Minister for Finance met the main mortgage providers in May. A clear schedule has been outlined to the banks. It has been made clear that the banks have agreed that by July there will be moves to ensure all customers have offers of lower payments either through lower SVRs or by fixing their mortgages for a particular term. The banks must respond to this initiative, as the Minister will meet them again in September. For that reason, it would not be appropriate to accept this Bill until the effects of current policy initiatives have been evaluated. In addition, all advice from the Central Bank indicates that the powers contained in the Bill would prove detrimental to Irish mortgage customers and the country as a whole in the long term.

Several factors militate against the untimely and opportunistic proposal by Deputy Pearse Doherty and his party. Since the recession and the sea change in the Irish mortgage lending market, there has been a decrease in the number of institutions offering mortgage products. This is not a healthy situation for the market, for the country or for borrowers. The Minister for Finance and the Department of Finance, and indeed the Central Bank, recognise and highlight the lack of competition and the apprehension that would be off-putting for any potential entrant into the Irish market. It is essential that we have a strong regulatory framework for policing banks, but they must be able to arrange their activities in developing products that will generate a profit.

Bank profitability is at the front and centre of any potential entrant's mind in deciding whether to operate in Ireland, as the Irish market is not a profitable one. However, when rates being charged are excessive they act as a brake on the economic growth of the nation, and the banks need to recognise that glossy advertising to attract people will be counterproductive if they fail to deal with their customers in a fair and transparent manner.

The issues that give rise to the current situation remain largely within the legacy of the Fianna Fáil Administration. The absence of Fianna Fáil Members this evening is noticeable. In 2006, when dark clouds loomed and interest rates began to rise, a former Minister representing a now defunct party said that Ireland did not need the revenue raised from stamp duty. In June of that year, by way of a written response to a question tabled by the current Tánaiste, Deputy Burton, the then Minister for Finance, later Taoiseach, Brian Cowen, of Fianna Fáil, said:

A high proportion of household indebtedness in Ireland ... relates to borrowing for house-purchase which, in turn, involves the acquisition of an asset for the households. ... It therefore reflects the strong performance of the economy and confidence in Ireland’s economic prospects. Demand for housing has risen strongly in recent years and has been underpinned by demographic factors, the innate strength of the economy and the impact of an accommodating monetary stance, including historically low interest rates. House prices have risen rapidly in recent years driven by these fundamental factors. It is reasonable to assume that, over time such factors as the large increase in new housing supply will restore equilibrium to the market. This should allow output to move gradually closer to sustainable demand and result in more moderate price increases.

Unpicking this answer exposes and explains the web of betrayal that was wrought on the Irish people. The former Minister went on to say that we would be in for a soft landing. This phrase will be remembered by all of us, as it was bandied about in Dáil debate after Dáil debate; the Official Report is peppered with the phrase. It leaves a bad taste even now.

Over a year later, Mr. Cowen's boss, the former Taoiseach, in his now infamous speech to the Irish Congress of Trade Unions, said of the people who urged caution:

Sitting on the sidelines, cribbing and moaning is a lost opportunity. I don't know how people who engage in that don't commit suicide because frankly the only thing that motivates me is being able to actively change something.

Of course he recanted this and apologised, but I wonder just how many lives have been lost to suicide since the financial crash that the Fianna Fáil Administration lumbered into as it believed its own bluster. How would those members of the Opposition who were part of that Administration explain themselves to the Irish people?

The borrowing-fuelled property market that ran amok with the boom, followed swiftly by the bust, dragged large numbers of young people into, and saddled them with, mortgages of up to 110% that would be ultimately unsustainable, resulting in negative equity as the much-touted soft landing became a catastrophic crash.

A total of 52% of Irish mortgages are low-yield tracker mortgages. It is against this backdrop that the current mortgage market is structured. The Minister for Finance has met with banks recently. We are waiting for the lenders to come up with options that will be available at the beginning of July. In the circumstances it is wholly inappropriate and most untimely that this Bill has been brought before the Dáil. I do not support the Bill.

Last month I stood here during Private Members' business urging the Minister for Finance to meet with and put real pressure on the banks. I said, "I would urge you to make it clear to them that as the banks stabilise and get lower interests rates from Europe, they must pass this on to the financially strapped mortgage holders across the country."

Dún Laoghaire has some of the highest house prices in the country, and by inference some of the highest mortgages. Most people who purchased a property after the Celtic tiger years are on a standard variable rate mortgage. Several helpless constituents have come to me in mortgage arrears. They are hard-working families who pay their property tax, universal social charge and water charges. It is one of the most compliant counties in the country. I am pleased to acknowledge that the Minister listened and has met with the six main mortgage banks in an effort to help homeowners in Dún Laoghaire and the rest of the country. I only hope that the banks will actually sit up, listen and do something about it.

Only last week I received an e-mail from John in Blackrock, and his thoughts say exactly what I think. I will read it in full:

There is a fear that a derisory offer of 0.50% to 0.75% will be offered by the banks and that the Government will accept this small, token reduction. It has been reported in the media that the Government is looking for at least a 0.75% cut in the standard variable rate, but I believe more should be demanded in order to undo the strangle hold the banks interest rates have had on mortgage holders over the past 7 years. This reduction should have been demanded years ago, which would have saved people thousands in increased interest payments. It is grossly unfair on the 300,000 or so standard variable rate mortgage holders who are paying through the nose to supplement the Tracker rates being paid by others. We have already, as taxpayers, paid more than enough to bail out the banks and enough is now enough. Currently the ECB interest rate is 0.05%. While the Irish banks' interest rates are the highest in Europe at an average of 4.2%. This is almost twice as high as the European average. Is this equitable? Is this fair? In an economy that is now slowly recovering some of its confidence, which has been hindered rather than helped by high interest rates of the banks, this is an important opportunity to release some cash flow back into the economy. Every euro paid in to a bank is a euro less spent in the economy. Thankfully, the banks have faced increasing political pressure in recent months to reduce their rates but I believe more should be done. A levy on the banks is not the answer either as we mortgage holders will not see any benefit in our pockets. While the recently announced cut of up to 0.38% by AIB on standard variable rate mortgages is welcome, the bank is still charging up to 1.5% more than it is charging in Northern Ireland. This is simply unethical and unacceptable.

It is unethical and unacceptable and I urge the Minister to ensure the hard-pressed homeowners of Dún Laoghaire are given some reprieve on their rates. I welcome the pressure the Minister is putting on the banks and I urge the banks to propose fair and viable options to reduce monthly mortgage payments in the coming weeks.

I welcome the opportunity to contribute to the debate on this Sinn Féin Private Members' Bill, which was introduced by Deputy Pearse Doherty. While we have some reservations about some of the details, the Fianna Fáil Party will support the legislation, as Second Stage is about broad principles, and I support the broad principle of giving the Central Bank the power to intervene in respect of the mortgage interest rates being charged by banks.

We need to get real in this debate. Approximately 300,000 standard variable rate mortgage account holders are being ripped off. Paying way over the odds makes a dramatic difference to a monthly mortgage repayment and can add hundreds of euro each month in interest above and beyond the rates that are charged elsewhere in Europe. Over the lifetime of a 20- or 25-year mortgage, Irish mortgage holders on variable interest rates are paying tens of thousands of euro more in interest than mortgage holders elsewhere in the European Union. I have yet to hear a logical explanation for the reason mortgage interest rates charged in Ireland are double the average rate in the eurozone.

I am pleased the campaign for fairness for standard variable rate mortgage customers is gaining considerable momentum. Since Fianna Fáil highlighted this issue during the debate on a Private Members' motion at the end of March, some progress has been made. Our motion resulted in a meeting being arranged between the Minister for Finance and the Governor of the Central Bank to discuss the issue of standard variable mortgage rates. We subsequently secured, for the first time, an admission from the Minister that the rates being charged by the banks are too high. The Central Bank has also produced a report on variable rate pricing, and while we can agree or disagree with it, at least it forms the basis of a discussion. The Minister also held six meetings with representatives of the various banks. It is now time for action.

As of yet, not one of the banks has reduced its standard variable rate on account of a meeting it has held with the Minister. The Minister of State, Deputy Kathleen Lynch, referred to the reduction in the standard variable mortgage rate charged by Allied Irish Banks. This reduction was announced by AIB's chief executive officer, Mr. David Duffy, at a meeting of the Joint Committee on Finance, Public Expenditure and Reform several weeks before the bank's representatives met the Minister. Bank of Ireland has since announced a reduction in fixed mortgage rates. The purpose of the meetings between the Minister and representatives of the banks was to secure reductions in variable rates. The statement issued by the Minister following these meetings was carefully worded. He indicated, for example, that simple options to reduce monthly mortgage payments for standard variable rate customers would be available by the beginning of July. As such, he can claim that the reduction in the fixed rate ticks this box and fulfils that promise.

The Minister's statement continued: "Some of the potential products include lower standard variable rates for existing and new customers, competitive fixed rate products and lower variable rates taking account of loan to value for new and existing customers." In tandem with this official statement, we heard a great deal of spin from unnamed Government sources who spoke to the media and indicated that an initial 0.25% cut in the interest rate would be followed by a second 0.25% reduction in a few months. We also heard that the Government fully expected standard variable rates to fall by 0.75% within the next year. Thus far, however, not one bank has reduced its variable rate on account of a meeting with the Minister.

The Minister should not accept a reduction in the fixed rate as a substitute for reducing the standard variable rate. The cost of funds for banks has declined dramatically recently as a result of lower funding costs from the European Central Bank and reduced costs on the wholesale markets, and because the banks pay little or no interest to savers and depositors. The variable rate has not fallen in line with reductions in the costs of funds. Instead, the net interest margin has increased dramatically. I accept that banks must be profitable, and the pillar banks are reasonably profitable again. However, if the cost of funds were to increase for the banks, they would not need to be asked twice to increase their variable interest rates. On the contrary, their variable rates would be increased almost immediately.

The House must speak with one voice on this issue, because the rates mortgage holders are being charged on standard variable rate loans are simply not acceptable. Regardless of whether the Central Bank wants to acquire the power to intervene where there is a clear market failure, it should be given such a power.

The House is tonight debating a Sinn Féin Bill and will soon debate a Fianna Fáil Party Bill on this issue. My party will maintain pressure on the Government. While we must wait until 1 July before we can measure the response from the banks to their meetings with the Minister, thus far, Ulster Bank, KBC and ACC have not commented, Permanent TSB has given a strong hint that it will not reduce its rate, AIB announced a cut in its rate before its meeting with the Minister, and Bank of Ireland has gone through the back door by reducing the fixed rate.

Fixed rates do not suit everyone, and many people do not want to move to a fixed rate. Bank of Ireland is only offering a fixed rate for existing customers who sign up to a minimum two-year term. If customers lock into a specific fixed rate and the variable rate subsequently falls significantly below the fixed rate, they will lose out a second time. For this reason, the campaign sets out to reduce the standard variable mortgage rates the banks are charging. The Minister and Government should not settle for anything else, and my party certainly will not settle for anything less.

This Bill, or similar legislation, is also required to address the sale to private equity funds of approximately 20,000 mortgages from under the feet of the mortgage holders. These so-called vulture funds are outside the control of the Department and the Central Bank. We are still awaiting the passage of consumer protection legislation covering this area, but even that Bill will not deal with circumstances in which the vulture funds decide to increase their rates. If they were to charge rates of 6%, 7% or 8%, the Minister and Central Bank could do damn all about it. This is not acceptable, because the mortgage holders in question are exposed to a real and unacceptable risk.

I welcome the Bill, and my party will support it on Second Stage. We will wait until 1 July to ascertain what has been the reaction of the banks to the Minister's statements. Thus far, it has been deeply disappointing, as there is no evidence that they have taken on board the spirit of the message the House has consistently sent in respect of the exorbitant standard variable mortgage rates they are charging.

I welcome the opportunity to speak on this extremely important issue. I compliment Sinn Féin on using its Private Members' time to introduce this Bill, which gives Deputies another opportunity to discuss excessive variable interest rates and the Government's handling of the mortgage arrears crisis. The softly-softly approach it has adopted is clearly not working. My colleague Deputy Michael McGrath, who introduced a Bill similar to this one some days ago, has led the charge in highlighting that 300,000 variable-rate mortgage customers are being thrown to the wolves by the Government. These mortgage holders are paying twice the European Union average interest rate at a time when the ECB is at an historically low level.

It was unbelievable to listen to Government speakers describe this as an inappropriate time to introduce legislation which would provide assistance to 300,000 people. Talk about being out of touch with reality. I wonder if they hold constituency clinics or meet and engage with their constituents on a daily basis.

We are told that the Minister for Finance met representatives of the various financial institutions.

Let us remember that the Minister originally said he had no hand, act or part in this. It was only after considerable pressure from Members of the Opposition and considerable media attention that he decided to engage with the banks. While the banks have until 1 July to produce a formal response, the early indication of what the banks propose is pathetic. Regarding Bank of Ireland reducing its fixed interest rate, most people on a variable interest rate do not want to be on a fixed interest rate. To listen to previous speakers talking about how we got here, it would appear that they think describing how we got here absolves them of responsibility for helping people who are in a particularly difficult situation with their mortgages. Earlier in the House, we voted for the establishment of a commission of investigation into certain transactions at the liquidated IBRC. Similarly to the action required on the variable interest rate, the establishment of the commission of investigation was initially rejected out of hand by the Government. It said there was no proof of wrongdoing. Now, it says it is only establishing the commission to reassure the public. What reassurance will the Government give to the 300,000-plus families being screwed by their financial institutions? They are looking in here and what they see is one rule for friends of Fine Gael and another for the ordinary Joe Soap. People with high borrowings with IBRC are availing of bargain basement write-downs on their debt and bargain basement write-downs on their interest rates. What does that tell Joe Public? It says the Government is not serious about helping and supporting families. If it was, it would be supporting the legislation.

As my colleague said, while we have concerns about certain elements of the Bill, it should be allowed to pass to Committee Stage so that we can examine how to improve it. As a party, we recognise the need for the banks to be profitable. We also recognise and acknowledge, however, the right of customers to be treated fairly, which is clearly not happening. The recent report by the Central Bank clearly outlines the dysfunction in the mortgage market and states that there needs to be greater transparency in variable interest rate policies. People who are looking on are absolutely bewildered at the margin the banks can charge and the difference being charged in this jurisdiction vis-à-vis the rest of the EU. Someone with a 20-year mortgage of €200,000 in Ireland pays €4,000 more a year in interest than people in the rest of the EU. How is that fair and equitable and how can the Government stand over it and allow it to happen? Nevertheless, Government Members say it is an inappropriate time to talk about this issue. I heard a previous speaker use the words "hopeful" and "confident," and say that he or she expected the banks to act in a certain way. The father of a young lady came to my constituency office. She is under huge pressure and depressed due to the manner in which the banks are dealing with her. She is in her early 30s and took out a mortgage in good faith which she paid consistently, on time and in the right amount for seven years. It was only after that that she got into difficulty. The manner in which the bank has dealt with her and her family has been wholly unacceptable, but we are told we are leaving it to the banks' control. Two years ago my party advocated for the removal of the veto, but we were blocked by the Government before it arrived at similar thinking. In the same way, the Government must reconsider introducing legislation to ensure the banks cannot rip off our citizens by charging high interest rates.

Before I finish, I want to touch on the wholly inadequate manner in which the Government is dealing with those in mortgage arrears. Again, a constituent of mine was lucky enough to be in receipt of mortgage interest supplement, given that the scheme was scrapped by the Government a number of years ago. She was getting €280 a month but because she negotiated a revised repayment deal with the bank whereby a greater percentage of the payment went towards the capital rather than the interest, the full mortgage interest supplement has been cut. She is a young woman with a husband and a child and the only income coming into the house is social welfare. How can she afford to pay her mortgage? She cannot. What help and support is she getting from the Government? She is getting none. The Government refers to the mortgage interest scheme and its representatives say the mortgage-to-rent scheme is there. When that was introduced in 2012, 500 applications were meant to be approved each year. There have been 88 since 2012. What does that say about the attention the Government is giving to those in mortgage arrears? It is giving none. I appeal to the Minister of State, Deputy Nash, to reconsider the Bill and allow it to pass on Second Stage to give all Members of the House an opportunity to tease out how we as elected representatives can bring forward legislation to give some hope and breathing space to the 300,000 people who are at the pin of their collars tonight.

Billions of euro were spent to rescue the banks at the expense of the taxpayer in the period after the economic crash. Now the banks are recovering, but they are showing their ingratitude and demonstrating unethical behaviour towards customers. There is a fear and distrust among the general public regarding the banks and the manner in which they have treated financially vulnerable borrowers. Certainly, it has impacted significantly on public opinion, and there is now a backlash. The banks do not seem to be taking any notice of the negativity from the general public, however. Up to now, the banks have paid little or no heed to the Government. The continuation of inflated variable interest rates as well as the unfair burdening of lenders are inhibiting our economic recovery. Due to the banks ignoring Government approaches and the proposals within the Bill, there have been suggestions in Government circles that there might be rate reductions of 0.25%. This is a punitive and pathetic proposed decrease. It may get all mortgages under 4% before the end of 2015, but it is not an adequate target for the Government to have.

Deposit rates are nil, allowing the banks to make a substantial 4% margin on all loans. The Central Bank has presided over and allowed this disproportionate practice of the banks exploiting their clients over recent years. The European Central Bank interest rates are at an historically low level, with up to 300,000 Irish mortgage holders required to pay mortgage interest rates in respect of variable rate mortgages which are excessively high in comparison with the ECB interest rates. The practice of the banks using mortgage holders to supplement loss-making elements of the mortgage book will have to be halted due to undue hardship. It is also hampering consumer confidence and severely restricting consumer spending. It is about time at this stage considering the very softly-softly approach from the Government benches. In general, the Taoiseach, the Minister for Finance and the Cabinet have been playing a waiting game with maybe too much pleading and holding back to see will the banks make any substantial move. We are well aware that thus far the whole situation is dismal with practically no concession given. This approach is not working and decisive action will have to be taken. The Central Bank should be given the tangible necessary powers to force the banks to reduce the variable interest rates to a reasonable level and therefore I support this Bill.

The Anti-Austerity Alliance is happy to support this Bill as an attempt to curb the gross profiteering of the banks. The rip-off of the bank bailout has been laid bare for all to see in recent weeks in particular as has the inequity of that bailout, where we see how the banks have treated the victims of austerity, those in mortgage difficulty due to unemployment and pay cuts, who are being asked and told to pay back every cent. Those who do not are pursued viciously and are led into extremely stressful situations, leading to them eventually losing their homes. There are no write-offs, no special deals and no bailouts for them. We have even seen an increase of 500% in court proceedings against mortgage holders. On the other side, particularly highlighted in recent weeks, has been the treatment afforded to the benefactors of austerity, the super wealthy, the capitalists, the Denis O'Briens of this world. They have been given sweetheart deals, write-downs and massive reductions in interest rates by IBRC and the banks at a cost of hundreds of millions of euro to the taxpayer. Following the bailouts and the crisis in this country we have been left with a largely publicly owned banking system. One may have thought that with a nationalised banking system we would have banks that would pursue policies that would take into account the overall good of society and of the economy as a whole rather than the narrow interests of maximising profits. In fact, the opposite has taken place. The bailouts and the nationalisations took place in order to let them reprivatise, of which a central part is driving profitability in the banks.

There has been a continuation and a deepening of the robbery of working class people. The holders of standard variable rate mortgages are particularly exploited and ripped off. They pay approximately 2% over the European average which represents a massive extra €330 a month for a €200,000 mortgage. This is a massive extra burden and hardship for low and middle income households, with a deflationary effect on the economy as a whole. The banks are consciously increasing their profit margin on variable mortgages to cover the losses on other loan books such as tracker loans and buy-to-let. When asked about it the Government's fundamental reply has been that it does not intervene in the day-to-day decisions of the banks and that it is a question for the management of the banks in question. The Government attempts to apply some sort of pressure but fundamentally it is a question for the banks. It is a pathetic attempt to wash its hands of any responsibility for this rip-off. The Government is responsible. It is a Government that stands over the banks having a mandate to maximise profit. The Government is pursuing the logic of profit maximisation. How else would the banks operate in a situation where they are making losses on one side of the business other than to pursue maximising profits where they can with those who have relatively little power, namely those with variable rate mortgages?

I was therefore disappointed to see that the Bill obliges the Central Bank to consider the profitability of the banks when deciding on its direction on rates. That accepts the logic that the banks must be run for profit which is the central issue here that we have to challenge. If the Government was serious it would introduce legislation, amend regulations and instruct the banks not to operate solely to maximise profits at the cost of ordinary mortgage holders. It would use the fact that we own the banks to run the banking system in the interests of the majority. The problem we have had over the past whole number of years is that we have had societies run in the interests of banks. Now we own the banks and we should run the banks in the interests of society. That would mean ending evictions and court proceedings against mortgage holders; writing down mortgage debt that is unpayable; and having interest rates that are payable by people.

The Central Bank (Mortgage Interest Rates) Bill 2015 provides the Central Bank with the power to direct covered institutions to lower mortgage interest rates in certain circumstances. I welcome this Bill as a positive, helpful and sensible proposal. It is also very relevant to what is happening in Ireland in 2015.

All Members have had families coming to our clinics and offices with their mortgage problems. These are decent, hard-working families, most of whom wanted to pay something and yet were being pushed around by banks and some of the financial institutions. They need our support and help and they need proper and adequate support from the Government. Many lost their jobs and yet they are being hammered. They are afraid and they are angry when they see the wealthy elite in Irish society getting millions written off while they scrape to survive. That is the reality for these families. Action is needed and there has been too much talk and not enough support for these families.

I refer to the detailed proposals in the legislation. Section 1 defines “interest rate” as the variable rate mortgage whereby the interest rate varies to reflect market conditions;"viability" means the ability of the covered institution to sustain or maintain growth and development in the market. There is concern about overheating of the economy. The Government is considering the idea of giving tax cuts to people who are very well-off and yet services need investment. A balanced approach should be achieved by putting money and investment into services, in particular services in health, education and disability.

Section 2(1) proposes:

The Bank shall consider from time to time whether it is necessary to carry out a review of the rate of interest being charged by the covered institutions on standard variable rate mortgages and may issue a direction to a covered institution instructing it to vary the level of interest it charges on standard variable rate mortgages.

Section 6 proposes:

(1) A person commits an offence if he or she without reasonable excuse, does not comply with a direction issued by the Bank under this Act.

(2) A person who commits an offence under this section is liable—

(a) on summary conviction, to a class A fine or imprisonment for a term not exceeding 12 months, or both, or

(b) on conviction on indictment, to a fine not exceeding €250,000 or imprisonment for a term not exceeding 5 years, or both.

As I strongly welcome this legislation and support it I am thinking of the 300,000 variable rate mortgage holders. They need our practical support and they need action from the Government parties. I welcome this Bill.

It is strong, decisive and inclusive and, above all, it helps mortgage holders who need our support in the current climate. The fat cats in society seem to be always getting away with things and getting the breaks. Now it is time for justice for all these families and, particularly, for the mortgage holders. I welcome the legislation and will strongly support it.

I, too, welcome the opportunity to contribute to the debate this evening and will fully support the legislation. It does not surprise anybody on this side of the House that the Government will not accept the Bill because it is about benefiting the small people who do not have the connections, who are struggling to survive and keep a roof over their heads. They are the people who do not really matter to the Government and have been the cannon fodder for the crisis and the recession. They cannot talk to special receivers and make a verbal agreement to ease things for them in the new dispensation. They constantly struggle, and the Government refuses to represent them.

Over the past four years we had to be such good Europeans. We had to take one for Europe, bail out our banks and ensure that no European bank would fail. We did that by putting ourselves to the pin of our collar, destroying our economy and doing untold damage to our society. However, when Members on this side of the House point out that the rest of Europe enjoys interest rates on variable rate mortgages that are at least 2% lower than the Irish average, we are told there is nothing we can do about it. How is it that we can pick and choose what kind of Europeans we are? We can be good Europeans when we put ourselves into destruction by bailing out banks, but we cannot be good Europeans in hoping and expecting to avail of the same kind of interest rates other European citizens enjoy? That is the type of European citizens the Government wants us to be and the type of Europe we are in - citizens who kowtow and tip the hat to Europe and say, "We will take everything you give us, we will take all the medicine you insist we take and will not look for anything in return that would benefit our citizens".

It is a sad reflection of why the Government is resisting the Bill so much and why it has resisted dealing with the mortgage crisis for so long. This crisis was first raised in the lifetime of this Dáil by the Technical Group in May 2011 during Private Members' business. We flagged that the crisis was coming down the road, but the Government refused to listen. The Government simply considers its role to be to bail out banks and save the European Union without benefiting the citizens of the State.

Over the past few months, much has been made in the media of the banks returning to profitability. It is reported that the banks are recovering and getting back to where they should have been, and that we can look forward to selling off part of them to recover some of the cost we put in to bailing them out. However, Deputies in this House have been at work outlining the differences in the interest rates and showing how the variable rate mortgage holders are the ones returning the banks to profitability. There are 300,000 variable rate mortgage holders paying over the odds in terms of interest rates, which could be costing each of them somewhere in the region of €4,000 to €6,000 per year in extra interest. That works out at over €1.2 billion to €1.8 billion in extra profits for the banks. Coincidentally, that is about the amount of extra profit they made this year. It is on the backs of those citizens that the banks are returning to profitability. Once again, it is a false economy. Although the Government claims to be driving a recovery, it is actually on the backs of citizens and vulnerable people.

I call Deputy Liam Twomey, who is sharing time with Deputies Áine Collins, Eamon Maloney and Michelle Mulherin.

Although I do not take too much notice of the members of the Opposition who take their banking policy from what was the old USSR, I was expecting a little more from a party that feels it actually should be in power some day. Deputy Pearse Doherty knows that when one puts forward legislation, one is supposed to look at things in totality. From my experience of watching Deputy Doherty in the finance committee, he understands finance and how legislation works. I do not think this Bill takes into account the grand totality of what is actually happening or what has been done for people in mortgage arrears, how the market works or what happens with banks. I am sure most of the Opposition Members have not read the Central Bank of Ireland May 2015 report on the influences on the standard variable mortgage pricing in Ireland, although they should read it. That report states that there are three main factors involved: credit risk, weak competition and bank profitability which is constrained by legacy issues. Some of those legacy issues stem from the fact that half the mortgages in our banking system are tracker mortgages. They are absolutely fantastic for the people who have them, but they make no money for the banks and drag them down. This impacts on how the banks work.

An interesting point was made, which could be investigated further by the Minister. When Richie Boucher came before the finance committee, he said that Bank of Ireland's mortgage book in the UK is similar in size to the book they have in Ireland. The mortgage book in England is considered to be of better quality, although the repossession rates in the UK are twice those in Ireland. He has a better quality loan book but twice the repossession rates. That does not make sense. One would expect the repossession rates to be higher in Ireland rather than in the UK. That is something that deserves investigation and discussion in this House, if we could have reasonable, rational debates rather than what passes as debate. If repossession rates are lower in Ireland, what factors are causing it? Is it because we have better protection from the Central Bank? Do we have better legislation protecting people with mortgages? Do we have courts that understand peoples' concerns better than the UK courts? We need to know these things.

It has been pointed out time and again that banks cannot take title back, to use that phrase, which describes them as the credit risk. If they cannot take the title back on properties for which they have loans, they say they have to pay more for the money they rent out to everybody. It is quite possible that, without realising it, there is a solidarity going on in this country among the 85% of people who are paying their mortgages on time and those who are paying their restructured mortgages. We do not understand that we may all be in this together more than we think. There are so many other factors coming into this, yet the proposed legislation is simplistic. I do not know what the thinking behind it is at all and cannot really understand where it is coming from. Quite a lot has been done to protect people and we can do more.

I am surprised the proposed legislation makes no reference to offering protection to people whose loans might be sold on, which are not protected under the usual structures we have for the banks. That is an issue for many people, as I am sure the Deputies across the floor understand. The legislation we are putting through the House right now is there to offer individuals who had their loans sold from the regular banks, which are covered by the Central Bank, protection under the code of conduct on mortgage arrears. It will ensure that they will not end up in the situation we have been hearing about, especially in respect of small businesses, where many of these so-called vulture funds are trying to take possession of people's property. We must continue to examine this in order to protect those individuals.

From Sinn Féin's experience in government with the DUP in Northern Ireland, has it done anything that has changed the way banking laws work in the United Kingdom and that follows the proposed legislation? Has Sinn Féin some experience it can bring from there? I do not think banking legislation in Northern Ireland has changed that dramatically. The situation up there is just as serious as it is down here.

I do not think this legislation is genuine or that the Sinn Féin Members genuinely believe in it at all. They are just putting it forward because they think there is a market for votes in this legislation. They are trying to sell this concept to the Irish people that the financial crisis and our economic system are somehow in silos, that what we do with this legislation has absolutely no effect on the variable rate of the other 85% of people who are paying their mortgages on time, that it is has no knock-on effect at all on the cost of credit to banks in the future and that this just happens to sit there on its own and makes no difference.

It is half the rate in Europe and the banks there are still afloat.

The Deputy will get a chance shortly.

The Deputies are taking the simplistic approach. Why does that difference exist?

That is what the Government Deputies need to ask themselves.

There are three big issues, according to the Central Bank, but I bet the Sinn Féin Deputies have not even read the summary, never mind the actual report on why there is a difference. I heard some of the Deputies' speeches, although not all, but I heard nothing in any of them that made any reference to how we are going to deal with these other issues. It is just the usual rant. You are a bit like Fianna Fáil used to be in opposition - the same old Fianna Fáil in a new shiny coat.

It is you who are the same.

That is what you are.

I ask the Deputies to speak through the Chair.

They are just the same. I would not mind if it was just a Private Members' motion because motions can often be more simplistic, but when Sinn Féin went to the trouble of actually writing legislation-----

Come on. Keep speaking up for the bankers.

Order, Deputy. You will get your chance in a few minutes.

The trouble is I am not speaking for the bankers; I am speaking for all of the people who borrow money in this country. That is who I am speaking for. You say you can isolate your actions-----

Sorry, Deputy. Will you please speak through the Chair, not across the floor?

I thought the Members opposite had a better understanding than that, but clearly not. They have a poor understanding of how legislation impacts across the economy. Even the Bill they want to put through would have significant impacts on other individuals with mortgages in Irish society. Their so-called solution could actually generate a bigger problem. This comes as a surprise to me. I actually thought they would have put more thought and effort into what they are doing, but clearly not. It might be useful to read what the Central Bank is saying and we might get a more sensible response to what is happening out there.

I welcome the opportunity to speak on this Bill. The area of variable interest rates is of concern to many mortgage holders, particularly those in distress. I refer to the part of the Bill which deals with trackers, many of which are costing the banks money, as we know. My view on all of this is that banking is a business, the same as every other business. In order to make it effective and competitive, we need more competition in the market; in order to do that, we need more banks to open in Ireland; and in order to do that, we need to be an attractive place for banks to come to do business. I hope that we see that take place in the coming months. Perhaps some European banks will come here and offer people an alternative, and allow them to change their existing mortgages to another bank. At that stage, they would be able to get the mortgage at a different rate.

My personal belief is that this is not something we should interfere in, as policy makers, and we should let the market dictate this. I know the Central Bank has looked into this and the Minister for Finance has spoken to many of the banks, which are due to report back before the end of July to give their views on what they will do on variable rates. That is an important process which we should let come to fruition before we suggest enforcing a particular rate and deciding how banks should operate. I do not believe that would be good for commercial business, for households or for first-time buyers. It would create a completely different animal and, while it might solve one problem, it might create many others.

Competition between banks is crucial, as is ensuring that the price customers have to pay moves in the right direction. We saw this worked previously in a different climate in Ireland, when interest rates were much lower. Back in the late 1990s and early 2000s, a person taking on a loan always paid arrangement fees and so on, but we got rid of all of those fees. We reached the stage where one wondered how banks could even operate and make a profit but we are now back to different conditions in business. Interest rates must be paid and loans must make sense, in the same way that deposits must be attractive for people to put money into the bank. Therefore, the way banks operate must go back to the normal way it was before what we would call the Celtic tiger, when interest rates were extraordinarily low and, as I said, one would wonder how the banks operated given the low fees.

That is my view. We should wait until the banks report to the Minister in July on what model they would like to use. At that stage, we will be able to see more clearly. I believe we need more competition in banking in Ireland. We should be out there looking for other banks, European banks in particular, to come to Ireland to set up, as this would solve many of these problems. This would be good for business given credit is an issue for small business in particular, although it is an issue for big business as well. We need more competition in the market to achieve this. There was a time when credit was free-flowing but, given the crisis, we have gone to the other extreme. We need to get back to normal conditions. There has to be an element of risk when a business borrows money, which is an important point, and we need a certain amount of competition in the market.

The Central Bank is very clear that regulating interest rates would have a negative effect on banking efficiency and hinder the entry of other banks into the Irish market. It was asked if we wanted the power to regulate rates. Future competition is a better way of creating a sustainable long-term solution. As I said, the Minister has spoken to the six main mortgage lenders in the last month and they are due to report by the end of July. We should wait for that process to conclude and then look at this again. My firm belief is that the Bill would not be good for business in the long term. We should let the market dictate this and the best way to do that is to have more competition in the market.

As there are no more speakers on the Government side, I call Deputy Dessie Ellis. He is sharing time with Deputies Martin Ferris, Sandra McLellan, Brian Stanley and Pearse Doherty.

With this Bill, Sinn Féin and Deputy Pearse Doherty are asking for nothing more than for the Government to do what it said it would: to act forcefully and decisively with banks to protect the public and, among them, the homeowners who bailed out these banks. In truth, the steps contained in the Bill would only be a small but important move towards making that commitment a reality. If it chooses to oppose this Bill, the Government will again be stating clearly that commitments to be strong and to act in the interests of the people are just something Labour and Fine Gael do at election time.

When Fine Gael and Labour took office, they took charge of quite a mess. Following a catastrophic bank bailout led by Fianna Fáil, which lied to our faces, many mortgage holders were left in dire straits, with falling incomes and big mortgages. The banks were ripping off Irish mortgage holders and a new firm hand was needed to bring these banks into line and protect homeowners. We were to be in no doubt of the intentions of the Government to change things. It did indeed change things in many respects, but it has not changed the situation of mortgage holders, who continue to be mistreated by the banks they bailed out.

The Government have been very good at showing little concern for the interests of many sections of society, such as the homeless, single parents, children, young women, students and Travellers, and the list goes on. However, it has been all too eager to protect the interests of those running these bailed-out banks, which have continued to ride rough-shod over the people of the State. The hands-off, softly-softly, laissez-faire attitude must end. We need that forceful and decisive hand in dealing with the banks that Deputy Eamon Gilmore promised us four years ago.

This Bill would be part of that change. This Bill is on the side of the homeowners of Ireland, not the banks, a position utterly absent from the Government's actions. The Bill would introduce a legal process to allow the Financial Regulator to set down a cap on the standard variable rate in bailed-out institutions.

It also gives power to the Minister for Finance to tell the regulator to set a cap should it not act on this power, and to seek reviews and reports on the use of this power by the regulator as well as setting regulations for its use. Depending on the context of the time, a cap does not have to be set, but should it benefit the public good the power is there to be used when and as needed. The regulator will be mandated to consider a number of factors when using this power, most crucially the impact on mortgage holders. This is a fair, reasonable and proportionate proposal which will tackle seriously a problem which should never have come to be, but has in any case been allowed to continue for too long.

The time for asking banks to comply with any notion of fairness is over. It is now time to tell the banks how things will be and what their responsibility is to the public who saved them. It is not acceptable that banks bailed out by our citizens should ignore their plight. As Deputy Pearse Doherty said, this is an extraordinary measure for extraordinary times. It is borne out of the need to tackle a problem which has only been allowed to grow and cause wider issues. The public still carries these banks. They must now play their part in making things better for struggling families and bringing fairness to their treatment of their customers. We provided an opportunity to tackle this problem earlier with the Interest Rate Approval Bill, but it was rejected. Now, as time has passed, stronger measures are required and a cap is needed. The Minister said the issue would be considered in the budget. We do not have time to waste.

When the House breaks for the summer, the struggles of families with variable rate mortgages will continue. They do not want to wait and see what will happen. They have done that for four years under this Government as they paid a rate which is higher than anywhere else in Europe and more than 1.4% higher than the median rate. The time to be decisive and forceful is now. It is already long overdue. Sinn Féin would consider going further than this Bill, but we have attempted to put forward a plan for tackling this problem that the Government would support. We want to see some action rather than no action at all.

The Bill should be supported. We should all support and back any citizens forced out of their homes as a result of unsustainable mortgages and interest rates. The Bill would be a further step in addressing the major mortgage crisis and the subsequent consequences for society in general. Supporting it is the right thing to do and will send out a strong message that, above all, people matter.

There is no sign in rural areas of the recovery the Government talks about on a regular basis. In fact, people are getting sick of listening to the talk of recovery. The constituency offices of every Member of this House are full of people in distress about their inability to pay their mortgages and the fear that they will lose their homes. A constituent who is facing eviction, possibly in the next number of weeks, contacted me today. A 25 year old man also contacted me today. He was given a mortgage of €250,000 from a lender at 19 years of age on the basis of two payslips. The same lenders are, for their own selfish interests, extracting every cent they can from the public and people who borrowed money to build houses for their families.

This Bill is the product of many years of work from Deputy Pearse Doherty who has been active on the issue of high interest rates since he set foot in this House. As far back as 2011, he asked Deputy Eamon Gilmore to ensure that the banks passed on the ECB interest rate cuts to ordinary borrowers and he was extracting promises from the Minister of State's former leader that the Government would act forcefully with the banks to ensure they passed on the rate reductions to consumers. Meanwhile, four years on the Government has watched people's distress and has done nothing to curb the powers of the banks. The banks still have a veto on any kind of mortgage resolution.

When I consider this kind of behaviour by the Government, sometimes I wonder if it is really so far removed from the reality of the lives of the people it is supposed to represent, or is it the case that it knows the reality but does not give a toss about the stress people are under and what that does to them, their families and their friends in terms of putting food on the table and paying exorbitant interest rates to banks that are way beyond anything else in Europe. The Bill is a response to the reality of the situation. The very high standard variable rate mortgages are a scandal. Irish mortgage holders are paying more compared to England and other EU states. The eurozone average is only 2.8 %, while people here are paying, on average, 4.26%.

We are bringing forward this Bill to put a temporary cap on interest rates. This is an exceptional measure for exceptional times. We are referring only to those banks that the people have bailed out and it is about time the Government put its foot down on behalf of the people who suffered because of that bailout. It is time to stand with the people against the banks. I and the people I represent are fed up watching the Government crumple in the face of the banks. The banks have a moral obligation to start giving something back to the people. The Government has been sadly lacking in that regard.

This Bill is very careful to give regard to the profitability and viability of the banks. It allows the Central Bank to set a maximum rate of standard variable rates at the covered institutions and even allows banks to look for a review of any cap after six months. The Bill only applies to bailed out banks, that is, the banks which would have gone under if the people had not bailed them out. Incidentally, the people were never consulted about that. These institutions now have some responsibility to society to give something back. They are State-owned banks and they have a duty to the State and, more importantly, to society. The interest rates are too high and if the banks will not act to reduce them, then the Government must. If the Minister of State was serious, he and his party members would, given what his previous leader said in the House in 2011, support the Bill.

I welcome the opportunity to contribute to this debate. My colleague, Deputy Pearse Doherty's purpose in bringing this Bill to the House is to tackle the unsustainable levels of variable interest rates being levied by banks on home owners. Under new legislative proposals by our party, the Central Bank would have temporary powers to impose a maximum cap on variable mortgage interest rates.

As my colleagues have previously outlined, Irish home owners are paying over the odds for these interest rates compared to other EU countries. This Bill is an effort to counteract the wholly ineffective response by the Government to fight the corner of home owners in any credible way. Some four long and painful years have passed since the issue was first raised. We were told by the Labour Party that we should be in no doubt that this Government would "act decisively, forcefully and effectively with the banks".

The continued penance being paid by taxpayers through mortgage rates, however, is nothing new. Rates currently being suffered by home owners in this State are among the highest in Europe. The standard variable rates here are almost double what they are across Europe. The measures proposed in this Bill would allow the Central Bank to set a maximum rate of mortgage interest for an individual bank for a period not exceeding 12 months.

The Bill is limited to the covered institutions quite simply because these are the banks which the people bailed out. They are partly owned by the people as a result.

This should, therefore, provide the Government with a mandate to act on the people's behalf. Under the proposed legislation, the Central Bank would have new powers to set out the maximum rate of interest which any of the five covered financial institutions could charge. Any bank affected by such an order could apply for a review after six months. This would cover eventualities such as a rise in the cost of money on wholesale currency markets.

Such rules and measures are in place for credit unions which cannot lend at a rate above 12.5%, as well as for moneylenders who are subject to individual maximum rates. Why not apply the same to the banks which were bailed out by the people of this State? Why not shift the power balance in a way that serves the people? It is about making a choice that will serve and protect families rather than banks. There needs to be a change from the fearful hands-off attitude to one that is on the side of the mortgage holder.

This Government's failure on mortgage arrears, on bankers' pay and in making the banks co-operate on insolvency cases is long documented. Its approach is always to put the banks’ interests first and the taxpayers' last. The banks in turn make gains and new demands. Recent research from the Central Bank itself evidenced that home owners are being ripped off to the benefit of the banks in that Irish standard variable rates are far beyond the European Union average at 4.24% compared with an EU median mortgage rate of 2.8%.

The banking sector is still broken and continues to sap the life out of citizens. There should be no illusion that the banking sector has changed in any significant way. The sector remains the largest drain on the economy. It cannot continue. It is unethical and unjust. Banks must be forced to play ball in creating a fair recovery rather than profiting from the lack of it. The Government needs to step up to the plate. It is incomprehensible that the State would not use its influence with those banks it owns to make it possible to bring rates down. It makes sense at this point of our economic development to act in the people's interest. It is not good enough for some banks to indicate they will reduce rates by the bare minimum.

We are calling on the Government and all other parties to support this Bill.

I welcome the opportunity to speak on this Bill. Deputies on the Government benches gave the basic message that we cannot interfere with the markets. There was another crisis in Irish history when we heard that mantra from the British Tories. It was during the Famine when people were left to the vagaries of the free market. We know what happened then. There are occasions when governments and public bodies must intervene.

The numbers of those in mortgage distress have not been dealt with by this Government. In County Laois alone, 16% of mortgage holders are in arrears, the fourth highest percentage in the State. Many of these people are under enormous financial as well as mental pressure. During the boom, many people working in Dublin were forced to buy basic three-bedroomed terraced and semi-detached houses in the commuter belt towns such as Monasterevin, Portlaoise and Portarlington. Many of them now find themselves in difficulty due to job losses. They are also paying double the interest rate that is applied in the rest of Europe. That is a scandal which the Government has done nothing to fix.

Many of these home owners also find the price of their houses has fallen dramatically over the past six years. Many of them were bought for €280,000 but are now only worth €120,000. In my housing estate, houses were selling for €260,000 during the boom but now some have been sold for only €95,000. These are the kind of hits people have had to take. People have these enormous debts with little possibility of paying them off. They also have no prospect of even selling the house, which is doubly demoralising.

Problems with mortgage debt are exacerbated by the attitude of the banks and lenders, many of which show little inclination to come to a reasonable arrangement with lenders in arrears. In the case of sub-prime lenders, they tend to be too quick to resort to repossession proceedings. I received a letter this week from someone with a mortgage with IBRC which demanded they sell the family home within six months or it would be sold from over their heads. IBRC later sold the mortgage for a fraction of what the person paid for the house to a company called Shoreline Residential. The home owner is at the mercy of this company which is now selling the mortgage to Start Mortgages. When one does not have regulation, that is the kind of wild west capitalism one gets.

With vulture funds increasingly active in this country, the level of repossession proceedings will increase. Earlier, the Minister of State, Deputy Kevin Humphreys, said that more than 8,000 repossession bills had been lodged with the Circuit Court in 2014. In excess of 1,600 of these were lodged in the single month of June 2014. It has also been claimed that the increase in proceedings has been due to the banks and other lenders realising that property prices have started to increase again. This has given them a huge incentive to sell these homes. The banks are now far more aggressive and pushy with no tolerance for arrears.

While the courts have generally been understanding of people who have been victims of these attempted repossessions, it is notable the number of repossession orders granted is increasing. The initiators, namely, the lenders - the banksters - are becoming far more aggressive and pushy. It is vital we have legislation to deal with this area.

Banks can refuse a reasonable offer for settlement because they were given the veto in the insolvency legislation. This gap was pointed out to the Government during the passage of the insolvency legislation several years ago. The banks have used this gap since then. The Government is meant to be bringing forward measures for the courts to deal with this. However, the problem is that the courts are already chock-a-block with cases and it will be cumbersome. An independent resolution body needs to be established to deal with this problem. Such a measure, along with giving the Central Bank the powers to control interest rates as set out in this Bill from Deputy Pearse Doherty, would bring relief to the hundreds of thousands of people who are suffering.

Tá mé buíoch go bhfuil deis agam labhairt ar an mBille seo, a thug mé féin chun tosaigh ar son mo pháirtí, Sinn Féin.

Our party has a long record in this Dáil of bringing forward legislation that aims to protect borrowers from unscrupulous lending by financial institutions. In 2011, when I challenged the Government on its failure to stand up to the banks to pass on a European Central Bank rate decrease, the then Tánaiste, Deputy Eamon Gilmore, told me: "Deputy Pearse Doherty need be in no doubt that this Government will act decisively, forcefully and effectively with the banks.”

It would be almost laughable in retrospect if it was not so serious. That was during Leaders' Questions in 2011. In 2012, I introduced a Bill to cap the interest charged by moneylenders, which was debated in the House. To this day moneylenders are allowed to charge rates of more than 187%. In 2013, I introduced the Interest Rate Approval Bill, which would have given the Central Bank the power to veto any mortgage rate increase at the covered institutions. This was at a time when AIB had in the previous weeks increased its variable mortgage rate by 0.04%, the third interest rate hike in 12 months. The situation has escalated to the point where we know from the Central Bank's report the banks are simply ripping off their customers in the State, and because one lives in Ireland and borrows from a financial institution in the State one is likely to pay more than any of one's counterparts in the European Union. People have painted the picture in our national newspapers that it amounts to approximately €4,000 in hard cash for the ordinary borrower. The Bill seeks to address this and end the rip-off of customers by the financial institutions. I thank Deputy Michael McGrath of Fianna Fáil, Independent Deputies and those Deputies representing smaller parties for their support in principle for the Bill. The Bill is a genuine reaction to a serious crisis we have the State. It is about a specific time-limited intervention for the public good. It is more than justified on social and economic grounds.

Section 2 of the Bill outlines the criteria the Central Bank must use to decide whether it will set a cap and issue a direction. These criteria include the current rate, any input from the banks concerned, the ECB rate, the profitability and viability of the bank, its mortgage exposure and, crucially, the impact of the current rate on the actual mortgage holders. This is a balanced approach weighing up the social and economic needs of the State and empowering the Central Bank to act accordingly.

Section 3 permits the Central Bank to set a maximum rate for standard variable rates at the covered institutions. In her speech the Minister of State raised as an issue that it would only apply to the covered institutions. The reason we did this was because we want the Government's genuine support for the legislation. If the Government believes it should apply to all financial institutions we are willing to accept this amendment on Committee Stage. Under the section, the Central Bank must give the bank a report outlining why it has set a cap, and if it decides not to set a cap it must report to the Minister its reasons for not doing so. Any cap placed will lapse after 12 months unless renewed. After six months any financial institution can ask for a review based on the criteria in section 2. This will hardly send a chill through international capitalists in Ireland or the European Union. Rather, it is an appropriate response to a market which is simply not working.

Further elements in the Bill protect the need for competition and diversity in the banking sector. The remaining sections of the Bill set out the practicalities and make it an offence for a person or bank to ignore a direction from the Central Bank. The Government instead threatens levies. Let us be honest, in most cases a levy on the banks is a levy on the customers. The Government's big stick to the banks is to threaten them with a levy that can be passed on to the very same customers paying their extortionate rates. In her response, the Minister of State cherry-picked her arguments and ignored the fact this is a temporary measure for extraordinary times. There is no recognition in the Government's response to the fact the market has failed. The Minister of State's answer is to carry on as normal and pretend this is a normal society which has not suffered a disastrous economic and social spell of austerity. There was no consideration in her response of the social imperative behind the Bill. She simply trotted out the same tired old arguments that are doubtful at the best of times and not far from completely irrelevant in times like these, when more than 100,000 families cannot pay their mortgages.

Listening to other Government spokespersons I was weeping inside. I heard comments from Fine Gael about leaving it to the markets and not interfering with regulation. If I closed my eyes I would have believed I was back in the Seanad in 2007 listening to Fianna Fáil and the PDs argue for non-intervention by the Financial Regulator in the financial system at the time. The same mantra was echoed by some of the Government backbenchers today. The Chairman of the Joint Oireachtas Committee on Finance, Public Expenditure and Reform seemed to have taken leave of absence from his facilities during his speech because he simply does not understand what the Bill is about. He asked about the 85% of mortgage holders on standard variable rates who are paying their mortgages. Does he not understand this applies to every standard variable rate mortgage holder in the covered institutions? He spoke about the fact this is not a solution. Did he not read the Central Bank's report which outlined three reasons, which I have read? He, along with other backbenchers, fails to understand the Government committed in its opening speech to examine the very issue addressed by the Bill, which is to empower the Central Bank to regulate interest rates. He fails to understand the Minister is calling in his buddies in the banks and asking them on bended knees please to reduce their variable interest rates because the Government is coming under severe pressure from the Opposition, campaigners outside and elements in the media. The State-owned bank responded with a pathetic 25% basis points reduction and Bank of Ireland simply gave the Minister the two fingers, stating it would reduce its fixed rate but standard variable rates would not go anywhere. The Minister says the Government is still considering introducing regulation and empowering the Governor of the Central Bank to do this but it will wait until closer to the budget and the time when it must go to the electorate. It is continuing to pretend it will do something about this, just like back in the days of March 2011 when the Government came to office.

Why would anybody believe the Government? The mortgage arrears crisis has got worse and worse and has now reached a point whereby four-----

It has not got worse and worse.

The Minister of State is shaking his head. Under his watch during the term of the Government the mortgage crisis has doubled. It has peaked and is starting to reduce but it has got worse and worse and these are facts the Minister of State cannot dispute. Four families a day are losing their homes. This is what the Government has in mind when it says it will stand up to the banks and will protect mortgage holders and citizens. We know the mantra but we also know the reality.

I acknowledge that yesterday Deputy Michael McGrath tabled a similar Bill, as did Senator Feargal Quinn last week. I welcome this because this is a genuine campaign to force the Government to do something which it states on the record it wants to achieve. The Government has not just said in recent weeks that it will empower the Central Bank to set interest rates for the financial institutions. This goes back to 2011. The Taoiseach himself suggested these powers would be given to the Governor of the Central Bank. At the time Mike Aynsley went on RTE to say the Central Bank did not want these powers. In 2013 I met the Governor of the Central Bank, Professor Honohan, to discuss the issue and we are very aware, as the Minister of State laid out in her speech, that he does not want these powers. However, these powers need to be given to the Governor of the Central Bank because all of the other approaches have failed.

We can argue over how the t's are crossed and the i's are dotted and we can argue over how many institutions should be covered, and this is what Committee Stage is for if we are genuine about improving the Bill to reach the objective which every party in the House wants to achieve, at least according to the statements which have been made, which is the reduction of standard variable interest rates for our citizens. The challenge is to accept it. It is time to put up or shut up. Let there be no doubt the Deputies who vote against the Bill are abandoning hundreds of thousands of mortgage interest holders who are being fleeced by their financial institutions.

Those financial institutions would not be in existence today if it was not for the generosity of those same customers whose Government bailed them out in 2008. This is about walking the walk, not just talking the talk. I ask the Minister, in a genuine way, to allow this Bill to go to Committee Stage so that we can put it up to the banks together.

I thank Deputy Doherty for bringing this Bill to the House and for the debate that has taken place as a result. We all share a deep concern about the issue of the high mortgage repayments currently being faced by mortgage holders, and the stress and hardship that this causes to families. I do not think any side of the House has a monopoly on this, as the concern is shared by all sides and views have been put forward on the matter by Deputies on all sides. The Minister has made it clear that a penal banking levy in the budget or powers for the Central Banks to regulate interest rates will be considered if action is not taken by the banks on this issue in the coming weeks. It is important not to have a debate in a vacuum, and that is the context of this evening's debate.

However, the setting of interest rates is a complex issue and any move to administratively control interest rates, as proposed in this Bill, should not be undertaken lightly, given the long-term negative impacts for borrowers, the viability of the banks, and the good of the economy and country at large, as well as the many citizens who want access to mortgages now and in the future. As such, the Government is opposing this Bill for the reasons that have been outlined in the debate.

Increased competition in the banking sector is where we want to get to, as this will exert pressure on the banks to reduce mortgage repayments. The influence of competition in reducing interest rates represents the best value for the consumer, the economy and the country as a whole in the long term. This has been recognised in the most recent ESRI report today, as well as the Central Bank report. The Government has been active in encouraging competition in order to achieve this aim and to give customers more choice. In this context, I also understand that the competition and consumer protection commission is planning to provide better information to consumers to encourage switching.

The Government is also opposing the Bill because it has already taken action. The significance that the Government places on this issue was highlighted in May when the Minister for Finance called in the senior management of the six main mortgage providers to discuss the issue and put forward his views. He also requested that the Central Bank provide him with a report on standard variable rates, which has since been published. The banks now need to act on this matter, and we will be closely watching, expecting action. Action at this stage such as that suggested in this Bill would be previous, as there have already been moves by some banks to reduce rates. We are awaiting additional progress on this issue from the other banks but there is no reason not to expect further developments in the near future. We have made clear what options the Minister for Finance has available to him at budget time should insufficient progress have been made. It would not be sensible, therefore, in the middle of this process, when the Government has set out a clear path to follow, to intervene until the full impact, scale and nature of the moves by the banks as a result of their engagement with the Minister can be gauged. It would certainly be the best solution if banks were to make the commercial decision themselves to reduce rates.

In addition, the Government is opposing this Bill as it contains significant flaws which could, for example, result in only certain mortgages being included under its scope. Furthermore, as it is restricted to covered institutions only, there are a considerable number of borrowers whose situation would not be addressed. The Government has also taken into consideration the fact that the Central Bank does not want the power to regulate interest rates. Deputy Doherty spoke of his days in the Seanad and the fact that people did not listen to regulators, but the Central Bank has clearly said it does not want the power to regulate interest rates. The Central Bank was asked if it wanted the power to regulate interest rates, and it does not. The Governor of the Central Bank has outlined his view that the introduction of administrative control on interest rates would be bad for the country and he re-emphasised that ensuring official policy does not inadvertently deter competition and entry of banks to the market is vital for the long-term health of the economy. The Governor is not a biased participant in this but is giving his clear advice, based on his expertise, to the Government and the citizens of this country, and some weight should be attached to his comments.

Well-capitalised banks operating more competitively will, in the end, offer lower rates and better service to borrowers. The Central Bank report also makes clear that banks should not exploit the lack of competition. It is on that basis that the Minister engaged with the six main lenders, and we expect to see action in the coming weeks. The Minister has made it clear what will happen and what options are open to him should such action not occur. The Minister has committed to reviewing progress on the issue of reductions in mortgage repayments over the coming weeks and a follow-up set of meetings with each of the six banks will take place in September in advance of the budget.

A number of Deputies raised the issue of the sale of loan books to unregulated firms. These will be protected by the Consumer Protection (Regulation of Credit Servicing Firms) Bill 2015 when it is enacted. As Deputies know, this is currently working its way through the Oireachtas, and we look forward to further discussion on that Bill on Report Stage, which I believe has been set for 17 June.

The next speaker was to be Deputy Gerry Adams, but I understand he is sharing with Deputy Mary Lou McDonald. The two speakers have 15 minutes between them.

I thank every Deputy who took part in this evening's debate. I also acknowledge and thank my colleague Deputy Pearse Doherty for introducing this legislation, and I thank Fianna Fáil and Independent Deputies for stating their support for allowing this Bill to go through to Committee Stage.

The Minister of State's rhetoric is depressing, though not unexpected. We are disappointed but not terribly surprised that Government will not support this Sinn Féin Bill. If recent history is anything to go by, the Government may well have moved to adopt Sinn Féin's position on this matter before the election, just as it did, very belatedly, on the bank's veto and on the need for a full, albeit limited, commission of investigation into the IBRC allegations and a range of other issues. However, it might just be too much to ask the Government to stand up to the banks. Ask the hundreds of thousands of families if this Government is capable of standing up to the banks. Ask those who know how the banks hold a veto over a new beginning because of the insolvency laws the Government brought forward. Ask all those who have lost their homes because the banks wanted the law changed to let them repossess family homes. Ask their opinion on whether the Government really believes that this is a bad Bill, or whether the Minister, the Government and all their friends are just afraid of the banks. I think I know and can predict what the people would tell the Minister if he were to put those questions to them.

This Government is neither willing to nor capable of standing up to the banks, on this issue or on any other. It hides behind EU rules and it hopes that foreign competitors will come riding in on white horses any day to save the day. That is simply not realistic. Fundamentally, all the arguments we have heard tonight against this Bill boil down to a single argument, namely, that the interests of the banks must come first. Never mind the social disaster that has brought us here and never mind the clear rip-off that is going on. According to the Minister, it seems that no account should be taken of the unprecedented situation we have found ourselves in for years. No account should be taken of the fact that we have lived through a massive recession, a huge part of which, let us remember, is down to the banks. The Minister says the Government will look at this again if there is not sufficient progress by the banks. I note that there is no definition of what might constitute sufficient progress. How are we to judge sufficient progress? Who will judge sufficient progress? The Bank of Ireland has already decided that it is not going to play ball. What is the Government going to do about that? I think we all know the answer.

The bank runs rings around this Government every day of the week and it is now beyond a joke. The Government owns the banks on paper, but in terms of policy, the banks own the Government. I do not know what country Deputy Áine Collins has been living in if she thinks banking is just a normal business.

It is far from it. The Minister says it is not the right time to act. How many hundreds of thousands need to be ripped off - a rip-off proved by the Central Bank - before it is the right time to act? One would swear, listening to Government, that there are hordes of banks lining up to get into Ireland and the only thing stopping them is the possibility of this mild and modest proposal. It is a mild Government intervention. We accept and we have stated that there is need for competition. However, we know that is not going to happen tomorrow or the next day. In the meantime, the Government seems content not to rock the boat and to let the banks carry on with the highest interest rates in Europe. One could not make this up. This "hear no evil, see no evil" approach to the banks and their scandalously high rates serves no purpose. It seems to be an ideological blind spot for the Government. It is a failed approach that shows that, after four years, this Government has learned nothing.

The Minister of State said that giving more power to the Central Bank could somehow raise issues of encroachment on the independence of the Central Bank. Let us think about that. How is it that giving the Central Bank more power makes it less independent? That has not been set out.

The Minister of State stated earlier that it would not be appropriate to accept this legislation in advance of the date agreed by the banks, by which time, she told us, they will have simple options in place to reduce the monthly mortgage payments of the hard-pressed households on standard variable rates. She said this as though there were any repercussions for the banks if they do not act by July or as if the Government was insisting on a set target by which to reduce rates when we know there have been no repercussions for the banks. The signs are that there will be no repercussions for the banks and the Government has taken a studied, deliberate and consistent hands-off approach.

There are no real reasons not to support this Bill. It is a reaction from a Government that knows it has done nothing for four years and is facing a very angry group of people who are being ripped off every month by banks owned by the Government. If the Government votes against this Bill, it confirms again its inability and unwillingness to take on the banks and to stand up for struggling mortgage holders. It demonstrates again that it has nothing to offer but lip-service for the ripped-off. It did this almost casually this evening. The Government's concern is not worth a single euro or a single cent to any of those struggling mortgage holders. It has nothing but lip-service for the ripped-off mortgage holders and empty, meaningless posturing for the banks, such as calling them in for a chat, to somehow win them over by the force of its argument. That has not achieved anything and the prospects of it achieving anything are minimal. The banks see through the Government. They have it sussed. The people see through it too. It is allowing them to be ripped off. It is as simple as that. Tonight's debate confirms that fact.

The Minister of State said that the banks need to act. How is that a convincing argument from a Government that itself refuses to act? Has he thought about the Government's credibility and standing in the eyes of banks that have been obstinate, greedy and totally unappreciative of the rescue afforded to them by hard-pressed citizens and taxpayers or did all of that float over his head? I ask him again to support this Bill in, as he said, the common interest we share for these struggling families, to allow it go to Committee Stage and to allow action after four years of inertia, denial and a disregard for those families.

In respect of the banks, which have caused so much damage to our economy and society, Fine Gael and the Labour Party in particular have talked the talk but have failed miserably to walk the walk. Speaking only last month, the Taoiseach described the refusal by some banks to cut interest rates as a "very serious matter", and said it would not be tolerated. He said: "We are not happy nor is it acceptable that you should have a position that banks are charging mortgages and mortgage holders a much higher rate than they are able to borrow right now." His contribution to this matter is, "We are not happy".

Increasingly, the Taoiseach acts as if he is a spectator or a commentator on the major political issues of the day. He is the Taoiseach. He is supposed to be in charge. Recent research from the Central Bank shows that home owners in this State are paying well over the odds for standard variable rates compared to other EU states. The average rate on outstanding standard variable rate mortgages here is 4.24%, compared to an EU median mortgage rate of 2.8%. The interest rate for new mortgages in Ireland, at 4.26%, is the highest of all the states that were analysed. The eurozone average rate is 2.1%, while in Ireland it is 3.42%. The current situation, whereby some mortgage holders are being ripped off while person next door, on a tracker mortgage, is paying the market rate is unacceptable and unsustainable. This is not a normal banking environment.

The banks have created a situation and the Government has tolerated it. For all its protestations, the Government allows it to happen. It is bad for householders, it is bad for families and it is bad for the economy.

There is no more pathetic a sight than watching Ministers whinge and whine about the failure of the banks to act fairly and then do nothing about it. Ministers and Government Deputies bleat about the great sacrifices of the Irish people. They praise, laud and applaud the great sacrifices the people have borne but at the same time, they cut child benefit and other social protections for the most vulnerable of our citizens and they have taken on the power to do this. They were not mandated to do it. They also have the power to instruct the banks to act fairly and that is what they were mandated to do. That is the type of positive action the people wanted when they elected them in 2011. They wanted a Government to act in their interests and not that of the banks. That is why they got rid of the other crowd; they were perceived as having created and tolerated the entire mess. The Government's approach of going cap in hand to the bank in regard to mortgage rates has got absolutely nowhere.

This Bill is a very reasonable and measured response to the scandal of the very high standard variable mortgage interest rates in this State, which are causing so much distress. I commend Teachta Pearse Doherty for bringing it forward. For the first time, under this legislation, the Central Bank will be able to set a cap after considering the likely economic and social effects. This is an exceptional Bill for exceptional times. It is not a permanent plan. Competition and other reforms are still needed in the banking sector. We have sought to limit the proposal at this stage to those banks which the citizens bailed out; in other words, the banks that we are supposed to own, the banks that the punters are supposed to own and the banks of which the people are supposed to have ownership.

It is very clear that the current situation, which could be at least rectified to some degree by this Bill, is going to be tolerated by the Government. The Minister for Finance said that the types of measures Sinn Féin proposes in this Bill will be considered in the budget, if they are still needed. If it is good enough to be in the budget, it is good enough to do now. That is what mortgage holders want. Banks have a moral obligation but they are not run on the basis of morality, no more than most politics, but they have to be encouraged and legislated into giving something back to a society and an economy to which they have done so much damage. They need to be forced to end the rip off of hard-pressed mortgage holders. That is what this Bill will do and I urge all Deputies to support it.

Question put:
The Dáil divided: Tá, 42; Níl, 67.

  • Adams, Gerry.
  • Broughan, Thomas P.
  • Collins, Joan.
  • Collins, Niall.
  • Colreavy, Michael.
  • Cowen, Barry.
  • Daly, Clare.
  • Doherty, Pearse.
  • Donnelly, Stephen S.
  • Dooley, Timmy.
  • Ellis, Dessie.
  • Ferris, Martin.
  • Fitzmaurice, Michael.
  • Fleming, Tom.
  • Grealish, Noel.
  • Halligan, John.
  • Healy, Seamus.
  • Healy-Rae, Michael.
  • Kelleher, Billy.
  • Kirk, Seamus.
  • Mac Lochlainn, Pádraig.
  • McConalogue, Charlie.
  • McDonald, Mary Lou.
  • McGrath, Finian.
  • McGrath, Mattie.
  • McGrath, Michael.
  • McLellan, Sandra.
  • Martin, Micheál.
  • Mathews, Peter.
  • Murphy, Paul.
  • Ó Caoláin, Caoimhghín.
  • Ó Cuív, Éamon.
  • Ó Fearghaíl, Seán.
  • Ó Snodaigh, Aengus.
  • O'Brien, Jonathan.
  • O'Sullivan, Maureen.
  • Pringle, Thomas.
  • Ross, Shane.
  • Smith, Brendan.
  • Stanley, Brian.
  • Troy, Robert.
  • Wallace, Mick.


  • Barry, Tom.
  • Breen, Pat.
  • Butler, Ray.
  • Buttimer, Jerry.
  • Byrne, Catherine.
  • Cannon, Ciarán.
  • Carey, Joe.
  • Coffey, Paudie.
  • Conaghan, Michael.
  • Conlan, Seán.
  • Connaughton, Paul J.
  • Conway, Ciara.
  • Coonan, Noel.
  • Corcoran Kennedy, Marcella.
  • Costello, Joe.
  • Coveney, Simon.
  • Creed, Michael.
  • Daly, Jim.
  • Deenihan, Jimmy.
  • Deering, Pat.
  • Donohoe, Paschal.
  • Dowds, Robert.
  • Durkan, Bernard J.
  • Feighan, Frank.
  • Fitzgerald, Frances.
  • Flanagan, Charles.
  • Gilmore, Eamon.
  • Griffin, Brendan.
  • Hannigan, Dominic.
  • Harrington, Noel.
  • Harris, Simon.
  • Heydon, Martin.
  • Keating, Derek.
  • Kehoe, Paul.
  • Kelly, Alan.
  • Kenny, Seán.
  • Kyne, Seán.
  • Lawlor, Anthony.
  • Lowry, Michael.
  • Lynch, Ciarán.
  • Lynch, Kathleen.
  • Lyons, John.
  • McEntee, Helen.
  • McFadden, Gabrielle.
  • McGinley, Dinny.
  • McLoughlin, Tony.
  • Maloney, Eamonn.
  • Mitchell, Olivia.
  • Mitchell O'Connor, Mary.
  • Mulherin, Michelle.
  • Murphy, Eoghan.
  • Nash, Gerald.
  • Neville, Dan.
  • Nolan, Derek.
  • O'Donnell, Kieran.
  • O'Donovan, Patrick.
  • O'Reilly, Joe.
  • O'Sullivan, Jan.
  • Perry, John.
  • Phelan, John Paul.
  • Ring, Michael.
  • Ryan, Brendan.
  • Spring, Arthur.
  • Stagg, Emmet.
  • Stanton, David.
  • Twomey, Liam.
  • Wall, Jack.
Tellers: Tá, Deputies Aengus Ó Snodaigh and Pearse Doherty; Níl, Deputies Paul Kehoe and Emmet Stagg.
Question declared lost.