Thursday 29 September 2016

Fianna Fail insists it will 'beat' banks into slashing variable rates for mortgage holders

Niall O'Connor Political Correspondent

Published 05/02/2016 | 13:45

Micheál Martin and Darragh O'Brien
Micheál Martin and Darragh O'Brien

Fianna Fail has insisted it will introduce measures to "beat" banks into slashing variable rates for mortgage customers in a move that has placed the party on a collision course with the Central Bank.

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During a press conference on housing today, Fianna Fáil senator Darragh O'Brien said he disagreed with Governor Philip Lane's claims that banks cannot be compelled into rate reductions, adding: "Phillip Lane isn't the oracle".

The party says its economic plan, due to be published next week, will contain a pledge to introduce "strong deterrents" aimed at stopping banks from charging excessive rates.

To date, the Government has failed to the address the scandal of variable rates customers in Ireland being charged up to 2pc more than in other countries.

At an Oireachtas hearing last month, Prof Lane said that interfering in the contracts between a lender and borrower was not in the bank's power.

"Banks have to be run on a commercial basis. We can discuss the issue about delivering competition in the banks, and we can discuss whether the existing high rates are likely to persist, but the Bank cannot interfere with the contracts between the lender and the borrower," he told TDs and senators.

But Fianna Fáil insists Prof Lane is wrong. The party says it wants to introduce deterrents in the form of levies.

"I don't agree with the Governor. There is thousands of variable rate customers paying way above the odds," Mr O'Brien said.

"Philip Lane isn't the oracle. I respect his view. But the reality is, we have people paying hundreds of euro per month above the odds, who are middle Ireland and they need to see a result," he added.

Meanwhile, Fianna Fáil has repeatedly refused to accept responsibility for the housing crisis and the  problem of homelessness. The party says the plan put in place by former Taoiseach Brian Cowen and the late Finance Minister Brian Lenihan has been followed by this Government.

The party's Environment spokesperson Barry Cowen said the "emergency" was caused by Fine Gael and Labour.

He said his party will put forward senior minister with responsibility for housing if i Government.

"They tell us...that 13,000 applicants were given keys last year alone, that's untrue, it's incorrect, it's disingenuous, it reflects badly on this country but that's not surprising," Mr Cowen told reporters.

The Fianna Fáil housing plan also pledges to build 45,000 social housing units and to restore Part V, which obliges developers to set aside units for social housing, to the 20pc level.

The party also wants to introduce a first time buyers savings scheme and raise rent supplement in Dublin.

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