A chara, – I refer to "What Moody's A rating really tells us about the new politics" (John McManus, Opinion & Analysis, May 21st). During the course of his assessment of the impact of the current Dáil arithmetic on the formulation of public policy, he states: "It would seem then that Fianna Fáil has embarked on economic sabotage even before the ink is dry on the political agreement by which Moody's has set such store". This is a sweeping statement that is entirely at variance with the facts.
The claim would appear to be primarily based on his analysis of the legislation I recently introduced in the Dáil on behalf of Fianna Fáil to give the Central Bank the power, in certain circumstances, to impose a cap on variable mortgage rates charged by financial institutions operating here.
The Minister for Finance himself has spoken of the need for banks to reduce their standard variable rates. He went so far as to say he would increase the bank levy should they fail to do so – a course of action I expressly ruled out on behalf of my party.
Other Fine Gael members, including its director of elections, have expressed sentiments regarding “rip-off variable rates”.
Action on the issue of variable mortgage rates was promised in the confidence and supply agreement between Fianna Fáil and Fine Gael.
John McManus himself recently berated the current Government for accepting the arguments of the insurance industry regarding price increases and took the sector to task for playing “fast and loose” with the facts.
Following that logic, the State cannot simply be an uncritical bystander in relation to mortgages which make up a far greater proportion of many household budgets.
There are many examples where the State intervenes to protect consumer interests in the face of actions of large institutions.
A code of conduct on mortgage arrears has been imposed on banks and the main lenders are required to meet mortgage arrears resolution targets. I’m sure these would not be described as “mindlessly populist politics”.
Among other matters the legislation deals with is the need for banks to treat new and existing customers on a fair and equal basis.
I’m sure this is a principle which would find favour among your readers.
In the course of the recent election, Fianna Fáil put forward a responsible and costed plan and reaffirmed our commitment to meeting in full the domestic and EU fiscal rules. We believe Ireland should continue to target a balanced budget in structural terms.
We were the first party to propose the establishment of a rainy day fund with any unexpected proceeds from corporation tax receipts. Fianna Fáil will be pursuing this issue during the course of the current Dáil term and in advance of the budget will publish proposals to reform the income tax system and the taxation treatment of the self-employed.
We are committed to supporting economic measures that are in Ireland’s national interest and where we disagree with government proposals we will put forward realistic and costed alternatives.
This responsible and balanced approach is a far cry from the picture of Fianna Fáil the author sought to portray. – Is mise,
MICHAEL McGRATH TD
Fianna Fáil
Spokesman on Finance,
Leinster House,
Dublin 2.