Varadkar downplays possibility of 'complicated' mortgage relief measure in budget

Speaking at a press conference at the British-Irish Council summit in Jersey, Mr Varadkar called for a “redoubling” of efforts to restore the powersharing executive and the Northern Ireland assembly

Taoiseach Leo Varadkar said interest rates are now only returning to their “historical average”. Picture: Damien Storan/PA

Taoiseach Leo Varadkar has poured cold water over proposals to introduce mortgage interest relief in the upcoming budget, saying interest rates are now only returning to their “historical average”.

Mr Varadkar said that while he understands the “biting” impact that increased interest rates are having on mortgage holders, rates are being increased as part of efforts by the European Central Bank (ECB) to curb inflation.

His comments come just days after the ECB opted to raise interest rates for the eighth time in a row in a bid to reduce inflation across the Eurozone.

“It [ECB] is increasing interest rates for a reason, which is to bring inflation under control and to restore price stability and if that can be achieved, that benefits everyone. People who have mortgages and people who don’t,” Mr Varadkar said.

“It is important to be frank with people about that, in terms of any interest relief in the budget, that’s something we’ll have to consider between now and then.

“It is certainly something that is complicated to do and it is only fair to point out that a lot of people who are now suffering from the increased effects of high interest rates would have been on very low interest rates for a prolonged period of time.

Interest rates between 3-5% are actually normal if you take the longer period of history or their closest historical average.

In recent months, Sinn Féin has continually pressed the Government to re-introduce targeted and timed mortgage relief for homeowners. Sinn Féin’s finance spokesperson, Pearse Doherty, accused the Government of having its “head in the sand” over interest rate hikes and called for the introduction of interest rate relief immediately.

Speaking during Leaders’ Questions on Thursday, Housing Minister Darragh O’Brien described that as a “significant intervention” and that it could not be done on an “ad hoc basis”.

Mr Varadkar also questioned how long such mortgage relief would be in place for and said there are other methods to reduce the burden on households, including tax cuts.

When mortgage interest relief was initially introduced by the Government in 2008, the yearly cost of the measure was approximately €700 million.

Northern Ireland

Mr Varadkar was speaking at a press conference at the British-Irish Council summit in Jersey, alongside Scottish First Minister Humza Yousaf, Welsh First Minister Mark Drakeford and UK Minister Michael Gove.

Asked about the ongoing impasse at Stormont, the Taoiseach said there needs to be a “redoubling” of efforts to restore both the powersharing executive and the Northern Ireland assembly.

“At the moment, there’s a lot of discussions between the DUP and the UK Government about them re-entering the institutions and we’re keen to do whatever we can to help that and work with all five parties in Northern Ireland to bring that about,” Mr Varadkar said.

He said he hopes powersharing will be restored in time for the next British-Irish Council summit, which is due to take place in Dublin this November.