Government will tell banks to pass on rate cut, says Tánaiste

TÁNAISTE EAMON Gilmore and Sinn Féin finance spokesman Pearse Doherty clashed in the Dáil over the Government’s actions to get banks to pass on European Central Bank interest rate reductions.

Mr Gilmore said the Government would if necessary call in the banks if they failed to pass on the cut announced yesterday by the Central Bank’s governing council.

He insisted the Government would act “decisively, forcefully and effectively” in the interests of mortgage holders in distress.

The Sinn Féin TD raised the issue amid expectations, later confirmed following the ECB meeting in Frankfurt, of a cut in interest rates. He highlighted the refusal of the Bank of Ireland and Ulster Bank to pass on cuts last month.

Hitting out at the Government, he said it had given a “pathetic display” of “jumping up and down” about the issue.

“Ultimately, after some bluster, ye simply did nothing.”

Mr Gilmore rejected his claim and highlighted a number of budget measures to help those in difficulty. He said, “I would hope on this occasion that they will do so”, and insisted the Government had taken action for people with mortgage difficulties and “are continuing to take action”.

Mr Doherty said Mr Gilmore might hope that banks would pass on the interest rate but “there are thousands of people who are hoping that this Government will do something.

“It is in your power not to be telling the banks that you hope they’ll pass it on but to actually act decisively.”

He told Mr Gilmore: “You are in power. You have the power to cut social welfare rates, child benefit, one-parent families’ rate. You also have the power to instruct the banks to pass on this rate. So act on behalf of the people’s interests.”

But Mr Gilmore said this was the first government to bring in the banks and address “the issue of passing on the interest rate reductions”.

These were the same banks Sinn Féin was “happy to guarantee three years ago”, he added.

He insisted: “This Government will act decisively, forcefully and effectively with the banks and anybody else in the interests of those who hold mortgages and are having difficulty repaying them.”