Committee on Finance. - Local Government (Remission of Rates) Bill, 1943—Second Stage. – Dáil Éireann (10th Dáil) – Wednesday, 3 Mar 1943

Committee on Finance. - Local Government (Remission of Rates) Bill, 1943—Second Stage.

Minister for Local Government and Public Health (Mr. MacEntee)

I move that the Bill be now read a Second Time. The main purpose of this Bill is to extend the period prescribed by the Local Government (Remission of Rates) Act, 1940, by the deletion in the definition of the expression "the prescribed period" of the date "the 30th day of September, 1942", and the substitution in lieu thereof of the date "the 31st day of March, 1945", and by the deletion, in the definition of the word "residence", of paragraphs (a) to (d), and the substitution therefor of the paragraphs set out in the present Bill. Originally, the date was fixed as 30th September, 1942, and the Bill now before the House will enable a similar remission to be granted in respect of houses completed before 31st March, 1945.

Another provision in the Bill relates to the definition of "residence", and the intention is to ensure that, where a remission of rates has been granted in respect of a dwelling constructed, or an improvement made, under any of these Acts, a man will not qualify for a further remission if any further improvement is made to the dwelling. The reason there is that once a grant has been made, and once a remission of rates has been granted, no further concession would be justified in respect of the enlargement or improvement of the house which had already benefited under the various Housing Acts.

Mr. Brennan

I should like to know from the Minister how this would operate in the case of a house that has been already subject to the remission of rates, and which now comes in under sub-section (2) of Section 2. I am concerned with cases where the rates have been remitted for some years, and I wish to know whether it is the intention under sub-section (2) that all these rates would be classed now as unpaid arrears of rates, and written up against the owner of the house.

Mr. MacEntee

No. The intention merely is to make sure that where a remission of rates has been granted, the person concerned cannot qualify for a further remission in respect of the construction of a dwelling, or an improvement made.

Mr. Brennan

In the new Bill, you have a new definition, and you want to make sure that no remission will take place where a grant has been already given, but what I want to know is, what will happen in the case of a residence, which was already the subject of a grant. Will it mean that a man, who has been enjoying a remission of rates for four, five, six, or ten years, will now have that curtailed or abolished, and not alone that but be charged with the arrears of rates for all these years?

Mr. MacEntee

No. The only proposal here is to ensure that once a remission of rates has been granted in respect of any houses constructed or improved under these various Acts, no further remission will be granted.

Mr. Brennan

It says here, in sub-section (2), that sub-section (1) shall be deemed to have come into operation upon the coming into operation of the Principal Act. Will not that mean that it will be retrospective?

Mr. MacEntee

But it further says that the provision shall not be construed as rendering unlawful, or as shortening the period of enjoyment of, any relief from rates under the Principal Act before the passing of this Act.

Mr. Brennan

Yes, but I am wondering is there a conflict between the two of them.

Mr. MacEntee

If the Deputy feels any doubt about the point, I shall look into it further, but I can assure him that the general intention is merely to ensure that, where a remission has been granted in respect of a dwelling constructed or an improvement made under any of these Acts, a man will not qualify for a further remission, if any further improvement is made to the dwelling.

Mr. Brennan

I should like the Minister to look into it. I do not know of any cases of the kind, but such a case might arise.

Mr. MacEntee

I shall examine it more critically, but I can assure the Deputy that the draftsman's instructions were to give effect to the principles I have outlined.

Mr. Dillon

This is a Bill by reference and it is therefore quite incomprehensible to anybody but the Minister and his officers. However, the Minister has done his best to explain it to us. Might I give a concrete case so as to get a ruling on the point? Suppose a man built a house in 1938 in respect of which he got £90 or the appropriate amount under the Housing Acts. Would he be entitled to enjoy a ten years' remission of rates on the new house until 1948?

Mr. MacEntee

Seven years.

Mr. Dillon

Then, am I correct in saying that the purpose of this Bill only is to secure that if he now, in 1943, builds a new wing to the house in respect of which he got a grant in 1938, no additional abatement of rates will be made in respect of that new wing?

Mr. MacEntee

Quite so.

Mr. Dillon

Will the new wing be rated 100 per cent.?

Mr. MacEntee

Yes.

Mr. Dillon

So that a situation would then arise in which he would have a residence on which he would pay no rates but an annexe thereto in respect of which he would pay full rates?

Mr. MacEntee

I would not say that the position would be that he would have a residence on which he paid no rates, because he must pay rates.

Mr. Dillon

Abated rates.

Mr. MacEntee

There would be part of the residence on which he would pay abated rates and another part on which he would pay the full rates.

Mr. Dillon

Suppose a man in 1943 built a new house and got a grant under the Housing Acts, would he not get the usual abatement of rates for ten years?

Mr. MacEntee

Seven, if he built a new house.

Mr. Dillon

But if he builds an annexe to a new house, he will not get any remission. Is there any reason for that?

Mr. MacEntee

For one thing, there is the fact that this was designed to encourage the building of new houses, and in many cases the amount of the grant was related to the floor area or the cubic content—I forget which—of the house. It was a particular type of house, the building of which we were desirous of encouraging, and we granted a remission—which is granted, remember, at the cost of the local authority—of rates in respect of that dwelling. Some of the local authorities have found this rather onerous, and, in addition to that, we have a situation in which persons who come under one Act would be disqualified from getting this remission in respect of enlargements or improvements which persons under another Act, as the law stands, might be entitled to get and might succeed in recovering.

We want to make the position uniform and to ensure that henceforward once a person has got his concession in respect of an improvement or enlargement which he has already carried out, or a new house which he has already constructed, he cannot come along again and get, as of right under the law, a further remission. So far as we are concerned our position is that we realise that these remissions are granted at the expense of the local authority and we feel that there must be a definite limit to the things we can concede at the expense of other people.

Mr. Dillon

I wonder if the Minister has considered a point which occurs to me. There may be no substance in it, but the Minister is familiar with the practice in rural Ireland of making over a house to young people, the old people going into a room. It has been a not infrequent practice in certain parts of the country when the old people are determined to retire to the west room, to build a west room as an annexe to the house, and you will very often see a thatched cottage with a slated portion added, the historical explanation of it being that it was originally the room. I regard it as a good social practice, and I wonder if this new arrangement prohibiting the family from getting any rating advantage on such a structure would in any way interfere with it? To tell the truth, I should not be prepared to certify that this new departure would adversely affect that practice. I had never thought of it, but I wonder if it has occurred to the Minister's Department?

Mr. Allen

The position is that they never did get a remission.

Mr. Dillon

Deputy Allen says that in these circumstances they never did get a remission of rates, but a great number of houses have been built all over the country in the last ten years in respect of which this remission was, no doubt, forthcoming. Under this proposal, if these people build an additional room, there will be no remission of rates in respect of it and, in fact, there will be 100 per cent. rates as from the date the new room is completed. I do not know whether that is a desirable arrangement or not. Prima Facie, it does not seem very desirable to me, but possibly I take an unduly grave view of the matter.

Mr. Allen

I think the Minister's decision not to give additional relief in respect of an annexe to a house which has already got a relief of rates, as well as a Government grant, is a sound principle. It is possible that there will not be very many such annexes or additions built to houses which have already received a Government grant or a remission of rates. They may be few in number in the normal course, but what I want to ask the Minister is how long this principle is to continue? It has been the practice in the last ten or 15 years to give a remission of rates in respect of new houses, but many local authorities are objecting to it, and are losing revenue each year as a result. They find that many old houses are condemned and allowed to fall down, while some houses are built, and that their revenues are decreasing owing to the operation of this relief of rates Act.

The State has been fairly liberal to people building new houses in the way of giving grants from the Central Exchequer. The system has been availed of, and it originated through pressure being brought to bear on the Government or on somebody else, by speculative builders who reaped the full advantage of this remission as the incoming tenant paid in full. The speculative builder, whom the Government quite rightly were interested to encourage to build new houses, reaped the full benefit of the relief which was not handed on to the tenant. If a private person built a new house, he reaped the benefit, but in the case of men building 100, 200, or 1,000 houses, the incoming tenant paid in full, while the speculative builder was enabled to reap additional benefits in the way of rates relief, in addition to his profits on building and his ground rents.

Mr. Brennan

How did he reap the benefit of rates remission? He never paid rates as he did not enter into possession.

Mr. Allen

Deputy Brennan knows quite well that he can reap the benefit. It is fairly well known how it can be done. If the rates remission arrangement did not exist, he would not get so much for his houses when selling them, or for his ground rents. That is a well-known fact.

I want to know from the Minister whether this policy is to continue in the future. We all hope that after the war there will be a lot of building done. Private persons have built something near the same number of houses as local authorities in the last ten years, and that is a considerable number. If the war is over and settled conditions come about within the next five or six or seven years, we hope that a new impetus will be given to the building of houses. But, if this policy is to continue over the next ten or 20 years, I put it to the Minister that it will mean a very serious impost on local authorities, both urban and rural. It is a matter for consideration and it should not be done hastily. Private persons or speculative builders should be given a fair warning over a number of years that this provision will cease in 1945 or 1946, or whenever it will cease, and will not be renewed, that that will be the definite policy of the Government. Many local authorities are up in arms against this at present. They find their valuations dropping year by year and the rate impost is increasing on the ratepayers. Therefore, I hope that the Minister will announce a definite policy as to the continuance of this relief of rates for persons who build new houses.

Mr. Corish

There is a lot to be said for and against this Remission of Rates Bill. Like Deputy Allen, I think that some of its effects could be questioned. In a great many cases big business houses find it absolutely necessary to extend their premises. I suggest that these are not cases in which the Remission of Rates Act should apply, because when these people extend their premises they are able to make large profits in consequence of the extension, and the smaller ratepayers in the towns or county areas have to pay for that extension without consideration of the profits that may be made from the business carried on. I think there should be a line drawn. I should have thought that the object of this Act would be to stimulate building, not only from the point of view of the speculative builder but of the person who would be building a house to live in. As to the speculative builder, I know of cases where people have built houses and, when fixing the rent of these houses, they have included the full rate that prevailed at that particular time. They charged a certain rent and the full rate was included in that rent, although they only paid to the local authority the particular proportion of the rates provided for in the Act. I think there should be some method by which the Minister or somebody in his Department would have access to the books of such a man to find out what profit he is making on the actual building of that house. He should be given a decent profit, but he should not be permitted to charge 100 per cent. of the rates to the person who has taken the house, and only pay the proportion laid down in the Act to the local authority. That has happened in a great many cases.

I mentioned before in this House certain cases which I believe should get relief under this Act but my proposal was turned down. I refer to cases of people who buy houses from a local authority under a system of weekly payments extending over a number of years. These people get no relief in rates. Some of them are a good deal poorer than those who are in a position to put up a certain amount of money, augmented by a grant from the Government, to build their own house. I suggest that persons buying a house from a local authority by means of a weekly sum should get relief in rates. Their case is more pressing than that of those people who are being given relief of rates under the Act in operation and who will be given relief under this new Bill. Therefore I ask the Minister seriously to consider the case of persons of that kind. There are many artisans and tradesmen who are buying their houses from a local authority under the system of weekly payments. They are charged full rates, while their neighbours, who are perhaps better off, and who are able to put up a certain amount of money to build houses with grants provided by the Government and the local authority, are only paying a certain proportion of rates over a certain period. I think that is very unfair. These are the people we should try to relieve.

Mr. MacEntee

With a great deal that has been said as to the disadvantages which arise from the granting of this remission of rates I am in agreement, but the position we are in at the moment is that there is so little building going on that, in order to provide employment, we are prepared to extend the existing concessions with regard to building operations for an additional period of two years. We anticipate that by 1945 the future will become clearer and possibly there will be a complete reconsideration and revision of the whole of the housing and rating code. At the moment it is quite clear that, in ordinary prudence, we should not remove any inducement which has been customary for the past ten years from persons who are prepared to undertake the construction of these new buildings. The object of the Bill is mainly to ensure that there will be no greater impediment placed in the way of people who are prepared to build and to give employment than existed prior to the occurrence of the emergency.

Dáil Éireann debate -
Wednesday, 3 Mar 1943