The first substantial Bill to come before the new Dáil will result in either a defeat for the Government or a forced tactical compromise with the two main Opposition parties.
In a deliberate strategy to send out a clear signal that the 32nd Dáil will be markedly different than its predecessors, Fianna Fáil has tabled a Private Members’ Bill on mortgage interest rates that reflects its own policy but also that of Sinn Féin.
The Bill is designed to give the Central Bank new powers that would have the effect of reducing monthly repayments for many of the 300,000 households paying variable interest on their loans.
Fianna Fáil brought a similar motion to the Dáil in March 2015, which was supported by Sinn Féin. Both parties have separately argued that banks have failed to pass on the current low rates in Europe and are “ripping off” their customers on variable rates.
Last night Sinn Féin indicated it would support the Central Bank (Variable Rate Mortgages) Bill 2016, which has been tabled by Fianna Fáil finance spokesman Michael McGrath.
“The legislation is within our policy as set out by the party manifesto,” said a spokesman. “Sinn Féin will be supporting it. We have said we will be constructive in Opposition, and this will demonstrate that.”
The net effect is that the minority Government is unlikely to muster the numbers to defeat the Bill. Fianna Fáil can be confident of at least 66 votes, giving it a strong chance of the Bill proceeding to second stage.
Second stage
One clause of the government-formation agreement between Fine Gael and Fianna Fáil is that all Private Members legislation (those sponsored by Opposition parties and groups) approved by the Dáil must be allowed to proceed to second stage (where the published Bill is scrutinised by the Dáil).
The Cabinet will meet this morning to consider its response to the Bill. If it opposes or seeks to amend the legislation, it is likely to suffer its first major defeat in a Dáil vote.
Taoiseach Enda Kenny told party delegates at the weekend that the new Government would not be able to dictate matters in the Dáil and would be frequently defeated on matters not related to confidence or finance.
Minister of State Finian McGrath, of the Independent Alliance, said last night that the group would meet in advance of the Cabinet meeting to decide its position on the Bill. Both Fine Gael and the alliance said they were yet to discuss their response.
Mr McGrath said it was permissible for the alliance to support such motions, if it saw fit.
Fianna Fáil has contended that variable rates for mortgages in Ireland are well above average European rates. It has said a cut of 1 per cent would benefit households by an average of €1,300 per annum.
“The Bill is essentially an effort to force variable mortgage rates closer to the European average,” a spokesman said. “We’re not trying to dictate variable mortgage rates to any individual bank.”
