Varadkar warns banks over tracker loans

The Taoiseach has warned the banks to repay the thousands of people they wrongly took off tracker mortgages and apologise. However, Leo Varadkar said as far as he is concerned, the deadline for the repayment and apology was “yesterday”.

His stern remarks came as he also admitted in an interview with the Irish Examiner that it may be years before the pensions anomaly hurting tens of thousands of older people is resolved.

Mr Varadkar and the Cabinet met in Cork yesterday, the first such meeting for a government in the country’s second city in 12 years.

Speaking on the grounds of University College Cork ahead of the meeting, Mr Varadkar reacted to reports of borrowers ruined by the tracker mortgage scandal.

Several mortgage-holders revealed how their health suffered after being charged the wrong interest rates. Thousands have been ripped off by banks but many have yet to be repaid.

Asked if the Government is considering setting a deadline for banks to make repayments to those affected, the Taoiseach said he was unsure if the Government has this power, adding: “But as far as I am concerned the date should be yesterday.

"Any bank, whether it is partly owned by the State or not, [that] took people off tracker mortgages incorrectly should put that right and should have put that right yesterday.

"They should repay what is owed, offer an apology and pay compensation. I am somebody that has a tracker mortgage and in many ways, it has been a godsend.”

Mr Varadkar said people have suffered very badly as a result of the banks’ actions. Meanwhile, he said it will take years to overhaul the State pensions system and address gaps in amounts people are getting.

Since the budget this week, there has been widespread concern over thousands of older people who are getting smaller pensions, in part due to 2012 legislative changes.

The Dáil heard how women staying at home have suffered “blatant discrimination”.

Years that people spent out of work have significantly reduced pensions due to a lack of contributions averaged out over their entire working life.

Advocacy groups have called for the legislation to be changed or reversed, a move which could benefit thousands, particularly women.

However, Mr Varadkar ruled out reversing the changes: “Under the system that was there before 2012, people who made 20 contributions got much the same pension as somebody who made 48. That’s not fair for obvious reasons.

"You would never say to a teacher who worked 40 years that ‘you are getting the same pension as somebody who worked 20’.”

Instead, reforming the contributory pension system could take years: “We’ll have to look at it comprehensively, what we are planning to move to, and it is going to take a couple of years to do this, is something called the total contributions approach.”

Under the new system, he said, it will be about “how many contributions you made over time, not when you made them”. However, the reluctance to make swift changes to the rules has angered advocacy groups.

Justin Moran, head of advocacy with Age Action, said: “Tens of thousands of pensioners right across Ireland are going to be disappointed and hurt by the Taoiseach’s comments.

“We’ve had people contacting us all week who are losing out on up to €30 every week because of the 2012 changes, who are never going to get the fiver Minister Donohoe announced on Tuesday [in the budget] and these people are effectively being told nothing will be done for them.

"These men and women are being punished for having got up early in the morning in the 1960s and 70s and gone to work.

“We have an unfair system where it is entirely possible for someone who worked for 20 years to get a much smaller pension than another who worked for half that time,” he said.