Varadkar brands SF spokesman ‘Kwasi Doherty’ in row over interest rates

Tánaiste Leo Varadkar has branded Sinn Féin’s finance spokesman “Kwasi Doherty” in a row over interest rate hikes, bank profits and a call for mortgage interest relief.

Mr Varadkar compared Pearse Doherty to former UK chancellor Kwasi Kwarteng, whose mini budget of major tax cuts and reliefs caused market turmoil resulting in his sacking and the demise of then prime minister Liz Truss.

Mr Varadkar claimed the Sinn Féin spokesman had learned nothing from what had happened in the United Kingdom, with “populist promises”.

He said: “I used to think it would take two years for Sinn Féin to wreck our economy. I think with uptake only one budget by Kwasi Doherty would do all the damage.”

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The Tánaiste made his remarks during Leaders’ Questions in the Dáil after Mr Doherty called on him to examine introducing “targeted, tailored and time-bound mortgage interest relief”, particularly for homeowners on tracker mortgages whose payments would increase by more than €2,000 a year.

The Donegal TD said the banks should absorb the expected 0.75 per cent European Central Bank (ECB) interest rate hike today. He said the banks were in a position “to do the right thing”.

[ ECB rate: More pain for mortgage-holders with 0.75 percentage point hike ]

[ Explainer: What will the ECB rate hike mean for your mortgage? ]

Bank of Ireland and AIB “have combined profits of €950 million” in the first half of this year, and the Central Bank made clear in May that profitability in the banking sector has recovered and is set to be bolstered as a result of re rising interest rates.

Mr Doherty said the interest rate hike would be a “bonanza” for Irish banks who were set to increase profits “excessively”.

He added that the Central Bank went further and said Irish banks “are positioned to increase their profits more than other European banks as a result of rising interest rates”.

“And according to the banks’ own estimates these interest rate hikes will bolster their interest income by over €1 billion each year.”

The Sinn Féin spokesman called on Mr Varadkar to join him in urging the banks not to increase the interest rates and to assist homeowners already hugely burdened by the cost-of-living crisis, and who faced an increase of more than €2,000 a year in their mortgage payments.

Mr Varadkar said Irish banks should not use rising interest rates as an opportunity to make excessive profits. But he rejected the call for mortgage reliefs.

He said: “I’d love to bring back mortgage interest relief for people who have tracker mortgages. I would benefit from [it] myself, by the way as would a huge number of my constituents in Dublin 15.

“But I can’t make those kinds of promises. We had mortgage interest relief in the past when interest rates were much higher than they are now. And we now have a prolonged period of very low interest rates coming to an end,” Mr Varadkar said.

“And we’re seeing interest rates go back to something that would have been considered much more normal five or 10 or 15 years ago.”

In an attack on Sinn Féin policy, he added: “It seems to me that you’ve learned nothing from what’s happened across the water Deputy Doherty.

“And now you’ve another set of populist promises to take advantage of people who have tracker mortgages. Like, when are you going to learn from what’s happened across the water.

“What the UK has done across the water which they’re now reversing is exactly what Sinn Féin proposed. And now you have another populist promise and you want to on people with,” Mr Varadkar said.