Dáil Éireann debate -
Wednesday, 27 Jun 1934

Vol. 53 No. 9

In Committee on Finance. - Vote 72—Advance to Guarantee Fund.

Mr. MacEntee

I move:—

Go ndeontar suim ná raghaidh thar £300,000 chun íoctha an Mhuirir a thiocfaidh chun bheith iníoctha i rith na bliana dar críoch an 31adh Márta, 1935, chun Roimh-íoc do dhéanamh leis an gCiste Urraíochta.

That a sum not exceeding £300,000 be granted to defray the Charge which will come in course of payment during the year ending 31st March, 1935, for an Advance to the Guarantee Fund.

The purpose of this Vote is, as stated on the face of the Estimate, to enable a further payment to be made to local authorities on foot of the local taxation grants absorbed in the Guarantee Fund in meeting arrears of land purchase annuities which were funded under the provisions of the Land Act of 1933. There has already been paid out of the Exchequer in respect of these funded arrears a sum of £1,616,000 which, with the sum of £300,000 that the Dáil is now being asked to vote, makes a total of £1,916,000. It will be remembered that the Land Act of 1933 provided for the funding of arrears of annuities in respect of the period of three years ending with the May and June gales 1933. Prior to the funding operations, these arrears had been made good at the expense of the local authorities by means of draws on the Guarantee Fund. During the progress through the Oireachtas of the Land Bill of last year—the present Land Act of 1933— the Minister then in charge indicated that recoupments would be made to the local authorities from time to time. No specific provision for such recoupment was made in the Act, but it has been our intention that payment would be made as and when the arrears were collected or, as in this case, when the finances of the local authorities appeared to require it and the Exchequer position permitted it.

I should like to emphasise at this stage that the local authorities have no right to receive payment in advance or in anticipation of these annuities. In the normal course they would only be credited with them when the people who were in default to the Land Commission, and in respect of whom the grants had been withheld, paid their debt to the Land Commission and so put the machinery of the Guarantee Fund in operation to release to the local authorities the amount which the defaulters had been responsible for withholding from the local authorities. It is common knowledge, however, that at the moment the finances of some of the county councils, the county councils in those counties in which a vigorous "no-rate" and "no-annuity" campaign has been proceeding for some time, are in an unhealthy condition, so that the local services are in jeopardy, due mainly, as I have already said, to the large volume of uncollected rates for 1933-34, or to the non-payment of annuities in those counties, which, of course, has involved the withholding of the local taxation grants from the Guarantee Fund in respect of the November-December gales of 1931. In fact, the position has been so grave that some councils have only been able to maintain the local services by means of large scale overdrafts from their treasurers. In these circumstances we have thought it advisable to come to the assistance of the local authorities and to make a payment to them on foot of the funded annuities, and it is with this in view that the Estimate for £300,000 is now being brought before the House. That amount will be distributed by the Department of Local Government and Public Health to the local authorities, proportionate to the amount to the credit of each county in the total funded arrears, subject to any minor adjustment which may be found to be necessary.

The position in 1933-34 in relation to the local taxation grants which passed through the Guarantee Fund has been worked out as follows: the unpaid annuities for the November-December, 1933, gales amounted to £470,749 against which fell to be credited payments amounting to £71,753 on foot of the arrears from the previous gales and certain miscellaneous items amounting to £25,405 odd. The difference of £373,591 fell to be met from the Guarantee Fund, and as a result the loss to the counties was £295,000 from the Agricultural Grant, plus £78,189 from the Estate Duty Grant.

General Mulcahy

For what year?

Mr. MacEntee

For last year. The distribution of the Agricultural Grant, therefore, amounted to £1,204,000 out of £1,500,000 exclusive of the special grant which has already been distributed. This advance of £300,000 to the local authorities approximately makes that good and enables those local authorities, whose financial position had been seriously injured by reason of the malignant campaign to dislocate the local services to which I have already referred, to be put on a proper basis and to carry on during this year under the new administration which, I hope, will do their duty to the country and to the people as a whole.

General Mulcahy

The Minister, I am sure, has not had to depend upon the reminders from this side of the House from time to time; he has, no doubt, not only seen himself in the Press, but has had conveyed to him from the members of his own Party, the very distressful state of affairs that exists in most counties and that has been referred to in such striking terms from time to time by various District Justices who have had to review the conditions and circumstances of men brought into their courts for the non-payment of rates. Various District Justices have described the conditions of those men as showing a pitiable state of affairs. Only recently one District Justice made up his mind not to hear any of those cases in his court again but to leave the matter entirely to the rate collector and let the rate collector bear his own statutory responsibility in the matter. This District Justice consoled himself that the farmers, at any rate, would always have something for their families to eat.

The Minister is not aware of the conditions in which many of the county councils find themselves. I pointed out here a few nights ago that the Limerick County Council have already protested that there is a sum of £88,000 withheld from them as the result of the non-payment of Land Commission annuities extending over a period. The Wexford County Council have been discussing whether or not they will increase the amount of money they are going to raise from the taxpayers by an amount equivalent to an additional rate of 7½d. in the £ by reason of the Minister withholding grants because of the non-payment of Land Commission annuities. The Minister has had his attention drawn to the cases of two particular counties, because of the attitude taken up by the Minister for Local Government. In the case of Waterford and Kilkenny, the Minister has had pointed out the very striking difference in the amount paid last year by the ratepayers and the amount paid in Government grants. It has been pointed out that in Kilkenny, which had the advantage of being presided over by a Fianna Fáil chairman, the ratepayers last year paid a sum, by the 31st March, that was only £3,800 less in rates than they paid the year before, but that the Government grants to Kilkenny had been £57,000 less than in the previous year.

The Minister for Lands has been asked for particulars as to the amount withheld from various county councils because of the non-payment of land annuities. The Minister is now making a contribution of £300,000 which he is allotting to overdrafts that these councils have, but the Minister will be forced very definitely during the year to come further to the assistance of county councils and to disgorge——

Mr. MacEntee

Is this a threat?

General Mulcahy

I am telling the Minister what the Minister must know, that he cannot squeeze out of the farming community in Kilkenny this year the amount of money that was squeezed out of them last year, dissatisfied and all as he may be with the amounts he got last year. He cannot do it, nor can he do it with the Waterford, Donegal, Limerick or any other county council that he may mention. If he thinks he is going to do it, he is living in a fool's paradise, and if his financial position for the year is based on the assumption that they will be able to pay, then his finances will be a bit top-heavy. The Minister has been asked to say how much is being withheld from the various county councils by reason of the non-payment of Land Commission annuities in previous years. I have suggested to the Minister for Local Government that the amount was £860,000 last year. We have been unable to find out the amount. Limerick has made a protest and Wexford is in the same position. This £300,000 may be wanted to wipe out the overdrafts arising out of the condition of affairs brought about in the country by the, to use the Minister's own words, malignant policy of the Government. He will be looking for more money during the year and he had better look fairly and squarely at the position of the local authorities and ask himself how fair it is to withhold at this moment from the local authorities the amounts that are still outstanding and due to be paid to them by the Government in respect of the non-payment of land annuities in the past.

Mr. Cosgrave

This is the sum which the Minister was reputed to have in mind to give the county councils on the occasion of the introduction of last year's Land Bill. In the course of the passage of that measure it transpired that a certain amount was being wiped off the slate for unpaid Land Commission annuity instalments. The total amount outstanding was £660,000. Portion of that was wiped out. As well as we can make out from the figures supplied in answer to questions, that sum would have been somewhere about £250,000. That had been already withheld from county councils. In consequence something like £400,000 must have been funded, on which the Minister is collecting 4½ per cent. This sum of £300,000 does not fit either of the amounts. If the Minister forgives a debt he has no right to forgive debts due to other people. The mere wiping off of this sum by an Act of Parliament is no justification for leaving the county councils short of that much money. What the reason was for fixing £300,000 to meet a debt of £660,000 is hard to understand. Is it proposed to retain the other portion of the debt, and is it proposed in addition to put the generosity which the Government exhibits on the backs of the county councils? If this sum were a sum to reimburse the county councils it should have been in the neighbourhood of £660,000. At no time during the last 12 years did the county councils require it more than now. Last year, I presume, some deduction was made in the agricultural grant which, in the ordinary course of events, should have gone to county councils. That was reduced by £448,000 from the previous year and a still further reduction of that sum at a time when it is hard to collect money and when prices for agricultural produce are low, will have a serious reaction. The financial position of the county councils must be very serious. If it were intended to put the county councils in the position that they were entitled to expect, this sum should have been £360,000 more than what it is.

Mr. MacEntee

We have listened to a typical statement from Deputy Cosgrave. He presumed that last year there had been deducted from the Agricultural Grant some amounts which should have gone to the county councils. There was nothing deducted from the Agricultural Grant last year except what was deducted through the operation of the Guarantee Loan. That is the procedure which has been functioning here for the whole ten years Deputy Cosgrave was in office and under which there had been withheld from the local authorities sums of considerable magnitude, amounting, with certain of the deductions that were made in 1932, to a figure of about £700,000, every penny piece of which was withheld from the local authorities under Deputy Cosgrave's administration before we came into office, and was withheld, in the ordinary course, because people did not pay their land annuities. It happened that this year there was a sum of something more than £300,000— about £360,000—worth of land annuities unpaid. The Guarantee Fund, in accordance with the decision of the Oireachtas, operated in regard to those non-payments, and, of course, with consequent decrease in the amount of money which was released from the Agricultural Grant to the local authorities. That deduction, however, was made in the ordinary course following the procedure that the Cumann na nGaedheal Government itself adopted when it continued, in the 1923 Act, the Guarantee Fund as a feature of land purchase legislation. Of the arrears in respect of which these moneys are now being released to the local authorities in anticipation of their payment, over £600,000 was withheld, not by us, but by our predecessors, and we did not get the benefit of one penny piece of that money.

In order to meet the situation which had been created, we funded these arrears, the greater part of which might be regarded as bad debts, and we have accepted the responsibility of collecting them over a period of 40 years. In justice and in equity, if we were to deal with the local authorities as our predecessors dealt with them, the amount which those local authorities would receive in any one year would not be £300,000 but would be, approximately, one-thirtieth part of the total accumulated arrears which were funded by the Act of 1933-34. We realise, however, that a large number of honest ratepayers and honest farmers in the country have found themselves, because they happen to reside within the jurisdiction of certain authorities which have not done their duty on the one hand, or on the other hand, are surrounded by neighbours who refuse to face their obligations to the State and to the local authority in respect of the land which they hold and the services which are provided for them. We realise that when these people, suborned by public representatives who should have a greater sense of their responsibilities, have failed to meet their obligations to the Land Commission, the consequence is that the local authorities suffer through the operation of the Guarantee Fund, so that the net grants payable to them in any one year have been considerably reduced. Frankly, we are not concerned with the position of the men who brought about this state of affairs, wilfully and deliberately brought it about in order, as they themselves have said, to dislocate the local services. We are concerned, however, with the position of the honest farmers and the honest ratepayers of this country who have met their obligations and who constitute the majority of the people of this country. In some counties they represent more than 99 per cent. of the tenant purchasers. In other counties—the wealthier counties —they have fallen considerably below that; but in every county they represent the majority of the tenant purchasers, and the majority, I am happy to say, has shown itself sensible of its obligations in this matter and has paid its annuities.

The position in which we find ourselves is this: that we are not going to allow these honest people to suffer individually because of the fault of their neighbours. For that reason, instead of only providing them with one-thirtieth part of the arrears which are due; instead of distributing to the county councils only the arrears which have been collected this year; we are anticipating that collection to the extent of £300,000 and are providing it this year to enable the local authorities, whose finance have been injured by this non-payment campaign, to face the current year unhampered and unencumbered. It is for that reason that the Vote is before the Dáil. In the course of his speech, Deputy Cosgrave referred to the position of affairs in Kilkenny. The council, as he said, had the advantage of being presided over by a gentleman whom I am proud to own as a member and as a colleague in the Fianna Fáil Party. What evidence did that Deputy give at the inquiry which was held into the administration in County Kilkenny? The whole purport of his evidence was that many members of that county council encouraged ratepayers in the county not to pay their rates, that no real, earnest effort was made to get in the rates, but that, instead, every possible form of incitement was used to induce people not to pay their rates and their annuities.

General Mulcahy

Is the Minister quoting from the Inquiry or is he drawing on his imagination?

Mr. MacEntee

I am quoting from the Inquiry.

General Mulcahy

Well, the Minister does not sound like it. The Minister did not read the Inquiry.

Mr. Cooney

It does not sound pleasant.

Mr. MacEntee

The main fact of the matter is that the majority of the tenant farmers in Kilkenny, as in every other county in Ireland, have paid their rates and are paying their annuities. What the majority can do, so can the minority if it were not for the fact that they are organised in a non-payment campaign.

General Mulcahy

Last year the ratepayers there paid only £3,800 less than they paid the year before, but the Government themselves defaulted by £57,000. They paid, for the upkeep of the services of Kilkenny, £57,000 less than in the previous year.

Mr. MacEntee

There was no default.

General Mulcahy

They paid £57,000 less for the upkeep of county council services of Kilkenny than the year before.

Mr. Fionán Lynch

The Minister for Finance, apparently, goes on the principle that by sufficiently frequent repetition of any statement, no matter how extravagant that statement may be, he will get some of it to stick eventually. The Minister, during the speech he has just made and during his opening speech, continually talked about a conspiracy, a malignant campaign against the payment of rates, and so on, without producing a shred of evidence to substantiate his charges. In the one case, in which the Government thought they had an opportunity of making the charge stick, they brought nine Waterford farmers on that charge before the Military Tribunal, having previously tried to prejudice their case by a speech of the President in Dundalk, where he talked about this campaign for the non-payment of rates, and, as I say, in that one case where they thought they had a shred of evidence of any such conspiracy, these men were brought before the Military Tribunal and found not guilty of that conspiracy. The Minister hopes by continually repeating it that it will eventually stick. Of course, it will stick in certain quarters, quarters where the total literature read ends with the Irish Press, which gives only one side of the story—the Minister's statement but not the denial. The Minister is speaking, of course, for his followers, who only read the Irish Press, where they will have only one side of the case put before them and where they will not be reminded that on the one occasion in which it was brought before the court the court decided that no case had been made out.

Mr. Cosgrave

The Minister is drawing very largely on his imagination.

This State took over the Land Commission on the 1st April, 1923. On the previous 31st January the amount of annuities outstanding was £640,000. There had been a very large addition in the previous year. But as has been stated in this House already, there is a difference between Fianna Fáil propaganda and propaganda from this side. This is the difference—one of the Ministers of State at the present moment, the Minister for Justice, issued a proclamation in December, 1922, threatening with the gun people who would pay annuities or income tax. The Minister is very pleasant in introducing what happened ten years ago but when he is reminded of the circumstances he looks to the Chair to know whether that is in order. I say to the Minister: "take your medicine."

Mr. Donnelly

Why not go back farther?

Mr. Cosgrave

We can go back farther if you wish. We can go back to 1921. Everybody knows what year that was. That was the year of the Black and Tan campaign. There is a reference in the case of the lawyers who advised the Minister in connection with the land annuities, that owing to the Black and Tan war and other reasons the land annuities were a bad debt and could not be collected. The total sum outstanding for land annuities in January, 1921, was £128,000. We took over the Land Commission when the arrears had mounted up to £640,000. That was on the 21st January, 1923. I do not know what they were in April, 1923, but the figure had not fluctuated very much. After the proclamation of Mr. Ruttledge, now Minister for Justice, and the Vice-President we wound up on the 31st January, 1932, with the position in which that sum had increased by only £20,000. What had been collected during the ten years? It was practically £40,000,000.

Mr. MacEntee

Tell the whole story.

Mr. Cosgrave

I will listen to the Minister telling the whole story.

An Ceann Comhairle

In the course of the debate on an Estimate a few days ago the Minister for Finance and the Leader of the Opposition brought us back ten years. Deputies are now attempting to do the same thing on this Estimate. Sometimes in a debate on the Estimates it may be necessary for purposes of comparison to make a very brief reference to ten years ago but a detailed history and a going back to what happened in 1921 would not be in order on this Vote.

Mr. Cosgrave

That sum of £640,000 was reduced and there had been collected the current annuities. Now, when a certain agitation started about this whole land annuity question it was to be expected that the arrears would mount up. But it went up only £20,000 above what it was when we took over the Land Commission. Not all of the ratepayers of the country are land annuitants. Several of them are not and these are not reimbursed to the extent that they should, having regard to the manner in which these annuities had been dealt with. In the normal course of events, it might have been expected if agriculture were in a prosperous state that a larger sum than one-fortieth each year plus interest would probably be unpaid.

The Government alters that without consent or conference with the county councils. They did more. They wiped out certain sums; these sums had been paid by the people who were not land annuitants at all. Something has to be said on behalf of these people. But from the fact that £360,000 was deducted last year from the Agricultural Grant, as has been already stated, a lower sum was paid for the Agricultural Grant last year than has been paid any year since 1931. In the year 1931-1932 the sum available for the Agricultural Grant was £50,000 short of £2,000,000. Last year the sum available for the Agricultural Grant was a little short of £1,750,000. Out of that £1,750,000 there has been made a reduction of £360,000. It is to be noted that this sum is to be reduced at the time when one Government is getting £4,500,000 on account of the land annuities and another Government is collecting £1,000,000 and adding £2,000,000 to the debt. When people talk of the agricultural position some advertence should be paid to the fact that if there is any attempt made to make the agriculturist dishonest, it is on the part of the Government. Nothing is more conducive to making people dishonest than to make undue demands on them, nothing is more conducive to making people dishonest than by putting hardships on them and making it impossible for them to meet the demands made on them.

References have been made to exhortations from these benches to make people refuse to pay. No such exhortations have been made from these benches. They are not necessary. The reason why the people are not paying is because they could not be expected to do it. At the moment when one Government is getting £4,500,000 off them and the other Government is reducing the Agricultural Grant by half and proceeding to collect these annuities is it not clear that it is beyond the capacity of agriculture to meet these demands?

That refers purely and simply to the annuitants, but there are others in a much worse position, the people who had bought out their land absolutely in the last 15 or 20 years. They got no advantage out of halving the annuities. They have got none of the advantages of that. Approximately £450,000 of the annuities were funded, that is practically wiped off. £250,000 of these moneys were met by the county councils. There is a contribution of £300,000 here. It is not enough.

Mr. MacEntee

The Deputy is in the position that the further he goes the lamer his arguments become. I am not questioning for a moment and I will not question for a moment the fact that when the Deputy took over, the arrears of land annuities were high. I have not denied that the Cumann na nGaedheal Government succeeded in reducing the arrears by a considerable sum. I agree with the Deputy that they did not bring them below the figure of £300,000, and they would never have brought them below that figure because those £300,000 were a bad debt which the county councils would never have collected, and which would have been wiped off. What I did say was this: when we came into office we found that the total arrears due to the Land Commission were around £750,000. Of that £750,000, a large part—£400,000—had been withheld by our predecessors from the local authorities.

General Mulcahy

How much has been withheld in the last year?

Mr. MacEntee

We have funded that and have spread the collection of it over a period of years. I say that. in equity, we are not bound to release any part of that sum until we have collected it. In this Estimate, we are anticipating the collection, and are releasing to the local authorities a sum of £300,000 of money which was not withheld from them by us but by our predecessors. That is the purpose of the Vote—to release that money and to make it good to them in order to relieve the position of the people to whom Deputy Cosgrave referred, who, first of all, have paid their annuities and all the other ratepayers from whom no annuities were due, but who have been placed at a serious disadvantage, and who themselves have been injured by the action of the people, from whom the annuities were due, in not paying them.

Mr. Cosgrave

What it comes to then, really is that the Minister is restoring £300,000, which had been deducted by us and for which he accepts no responsibility, but he has deducted from them £360,000.

Mr. MacEntee

A bad debt which you could not collect.

Mr. Cosgrave

Now we have it. Assuming for a moment that all those things were bad debts and that we start in a new, the first thing he has to deduct is the sum of £360,000, and he is giving back £300,000. Might I just interpose this remark, that, on balance, comparing the position on 1st April, 1923, with the position on 31st January, 1932, there were actually less moneys outstanding in respect of the 1903 Act on 31st January, 1932. The Hogan Act was added in the meantime, and the arrears in connection with that were over £120,000—they might have been £150,000; it is some time since I saw the figures. As between the arrears under the Hogan Act which had accrued during the period and the total sum, a lesser sum was left outstanding in respect of the 1903 and previous Acts than there was when we took over in 1923.

Vote put and agreed to.