On Monday last, the Permanent TSB announced an increase in its interest rates for standard variable rate mortgages, which will result in €42 million being taken from its mortgage payers. The clear indication is that other banks intend to follow suit, which would mean the removal of a further €300 million from the pockets of mortgage holders, of whom up to 350,000 may be affected. As the Taoiseach is aware, banks always have had a duty of care. However, although there have been many instances of people being offered loans amounting to five, six or ten times their salary or of people being approved for loans for which they never applied, there has been no concession in respect of debt forgiveness by the banks, which knew what they were doing. While the Government has given the banks a guarantee, has established NAMA and engaged in recapitalisation, the end result is further pressure on up to 350,000 mortgage holders. What has the Government done to suggest to banks that there is another way and that they do not need to impose interest rate increases on standard variable mortgages held by hard-pressed people? What has the Government done to prevent further mortgage increases taking place?

The Minister for Finance outlined the position on this matter in the House last week when he took the Order of Business. It is important to note that the question of funding for the cost of finance into our banking system is a matter that is of clear concern to the Government. It has been following policies that have ensured that the cost of money and terms used by the Government or available to the banking system is in line with what bond markets are paying. We have not been at the higher end of that scale for some time because of the decisions the Government has been taking.

On this issue, codes of conduct are in place in respect of mortgage arrears for those who have problems paying their mortgages. The Government will examine further measures in addition to what it already has decided. The Minister mentioned initiatives in the budget regarding the extension of the mortgage interest subsidy to 2015 for those who require it, namely, those who bought since 2004 when the price of housing was at its higher end. All those measures are in place to assist people in this way and to ensure they receive fair play and engage with the banks in trying to reschedule their commitments.

The Government appointed public interest directors to serve on the boards of banks. Is it in the public interest that at this time of economic difficulty, mortgage interest rates should rise, having been driven up by the banks that have been given a guarantee, a recapitalisation and NAMA? As the Taoiseach is aware, the banks' cost structures have not been kept down in line with their European counterparts. I understand that if Allied Irish Banks and Bank of Ireland were to reduce their cost bases to levels comparable to Lloyds or Banco Santander they would save €1.3 billion, which is more than three times the amount they expect to take from mortgage payers. That cost base structure could be reduced by considering private dining rooms, private art galleries, limousines and all of the other excesses that banks and bank boards have put together over the years. Were the banks to reduce their cost structures to European levels, there would not be the necessity to have an increase in mortgage interest. Prior to the banks ever contemplating such an increase, will the Taoiseach — as the Government is the largest shareholder in the banks with public interest directors on the boards — see to it that the Minister for Finance calls in the banks and demands to see their plans for cost structure reduction to bring them into line with European banks and create savings of more than €1 billion? This would also mean there would be no necessity to impose further mortgage increases on 350,000 mortgage payers, 27 of whom came to my office yesterday.

This has gone beyond a joke. The commercial reality is that the dogs on the street know the banks will increase variable mortgage rates. The Government is the biggest shareholder and has provided NAMA, a guarantee and recapitalisation and as such can tell the banks it wants to see their plans for cost structure reduction. Will the Taoiseach give the House a guarantee that the Minister for Finance will call in the banks and demand to see their plans for cost structure reduction prior to them ever contemplating imposing further mortgage increases on 350,000 mortgage holders?

The levels of mortgage interest rates at any given time reflect a broad range of factors, including ECB base rates, deposit rates, market funding costs, the competitive environment and an institution's overall funding. I do not know what level of retail outlets the Deputy wishes to see closed to make up some of the cost savings he claims he can make in banking services in this country. Mortgage rates are at an historic low and whatever trends there may be in the future, the important thing is to try to help people who have difficulties with their mortgages. As I stated, initiatives have been taken by the Government and by an interdepartmental group working on the issue and the Minister for Finance will consider these in due course. We consider all of these issues in a way to be helpful to those with problems but, at the same time, we must ensure that we have a competitive banking system here.