After he was elected, the Taoiseach said the Government would act decisively, forcefully and effectively with the banks and anybody else in the interests of those who held mortgages and were in difficulty in repaying them. Last week, for the second time in one month, AIB announced a major increase in its standard variable mortgage interest rate, to 4%, affecting 70,000 householders in the process. A mortgage expert has described this increase as absolutely obscene. This decision is further evidence that the banks and the Government have essentially abandoned mortgage holders, particularly those with mortgages at the standard variable rate. Deputy Michael McGrath, from my party, has estimated and illustrated that mortgage holders with a tracker mortgage of €200,000 will pay €224 less per month than those with a mortgage at the standard variable rate, a differential of €53,760 over a 20 year period. This will bleed ordinary householders across the country. As Constantin Gurdgiev and other economists have argued, it will also bleed the economy. It will rob it of disposable income and not facilitate the spending required. This is against the backdrop in July of a reduction by the ECB in its rate, but Ireland's pillar banks decided not to pass it on to customers. In fact, AIB increased its rate further by 0.5%. In essence, despite all the loud protestations and rhetoric, it is very clear that those with a mortgage at the standard variable rate are bearing a disproportionate burden and are being absolutely screwed.

The Taoiseach has remained silent on this issue. He indicated some time ago that tracker mortgages could be moved to the IBRC and that this would help the overall restructuring of the banking system, potentially allowing for some relief for customers at the variable rate, but no such action has taken place.

Will the Deputy ask a question, please?

The Taoiseach committed to forcing the banks to forgo a 0.25 basis point rise through savings in administration costs. That was included in the programme for Government, but the Government has done absolutely nothing about this either.

Both the Labour Party and Fine Gael have been silent about it. What is the Taoiseach's strategy? Does he accept that the differential between tracker and standard variable rate mortgages is unacceptable and places a disproportionate burden on standard variable rate mortgage holders? What does he propose to do about it?

The first thing the Government had to do was to consider the number of banks and their dysfunctionality, and the situation with regard to lending policy and the distress people were experiencing with mortgages. The Government downsized the banks to two pillar banks, Bank of Ireland and Allied Irish Banks, both of which are deemed to be banks for the future. Clearly the Government is not in a position to direct that interest rates should not be passed on. We have made that point to the banks following reductions in interest rates by the European Central Bank on a number of occasions. This is a commercial decision by Allied Irish Banks. I acknowledge it is difficult and challenging for people who are on variable rate mortgages but it is necessary that the banks get back to profitability. If that is not to be the case, the State will have to continue to recapitalise them.

In so far as dealing with mortgage distress and difficulties is concerned, Deputy Martin is aware that the banks have attended a number of meetings of the Economic Management Council to discuss their forbearance strategies in respect of mortgages, negative equity and those who are in mortgage distress. The Government has pointed out the need to respect the code's provisions that people's houses should not be taken away from them and that a solution should be worked out in each individual case, requiring the banks, in some cases, to train personnel to deal with those whose mortgages are in arrears or distress. The Government has set out the position in the Personal Insolvency Bill 2012, which is proceeding through the House and will, we hope, be fully enacted by the end of this year with an effective date for implementation early in the new year. The director of the new agency takes up duties on 22 October.

The Government is acutely aware of these issues. We interact on a constant basis with people who have difficulties with mortgages and constantly remind banks of their requirements and responsibilities for dealing with mortgage holders in implementing a range of options. I intend to expand the remit of the Cabinet committee dealing with mortgages and arrears so that it can also deal with banking issues in general, because a number of major decisions will have to be faced in the coming period.

I listened to the Taoiseach's language. He stated that the Government is actively aware of the issue, is interacting with various bodies and is reminding the banks of their duties, but the Government is doing nothing in any meaningful way to alleviate the disproportionate and unfair burden on standard variable rate mortgage holders. That is the bottom line, despite what the Taoiseach has said.

Last November, when the banks did not pass on the ECB interest rate reduction, he hauled them in with a great show of rapping their knuckles and demanding action. It was a "talk tough, do nothing" approach, but he is not even talking tough anymore. People are feeling alienated and let down because he made specific commitments to intervene effectively on behalf of mortgage holders. He has not intervened in any shape or form, however, and we are long beyond that point. I am not the only person who is saying this. The Central Bank and the IMF have been highly critical of the lack of progress and the slowness of banks and the Government to address the issue of mortgage arrears. Nearly 70,000 mortgages have been in arrears for longer than 180 days. Approximately 460,000 people are members of families experiencing the mortgage arrears crisis. The Personal Insolvency Bill will not be fully implemented until early 2013. It is dragging on. The Government is standing back from the problem and it is letting mortgage holders down. In the process, not only they but also the economy are being screwed.

They are being bled dry.

For the information of Deputy Martin, “actively aware” means that people walk in to my office and those of every other Government Deputy and Minister to make us fully aware of the difficulties and challenges they face in respect of their mortgages. “Interacting with the banks” means that when we have occasion to engage with banks through the Economic Management Council, we speak about mortgage arrears, their forbearance strategies-----

They increased the rate twice.

-----and their application to issues related to mortgages and mortgage distress. This was a commercial decision by a bank which the Government considers to be a pillar bank for the future, along with Bank of Ireland, and if it continues to charge an unsustainably low rate for variable-rate mortgages the impact will be that 2.1 million taxpayers are required to subsidise the bank even further in respect of the 70,000 mortgage holders who are experiencing difficulties.

The code on mortgage arrears means that banks and other lending institutions have the opportunity to sit down with each of the individuals and families involved to work out a solution. AIB's standard variable rate of 4% will remain the lowest in the market. These decisions are taken by the board of a bank-----

The Taoiseach is endorsing them.

Who sits on the board?

-----which the Government expects to return to profitability in due course so that it is a commercial bank which conducts its business in the manner one would expect with members of the public, mortgage holders and business people. The situation is not as the Deputy says. The Government is acutely aware of what is happening, but it is also important that the banks implement the series of options that have been set out.