Many Deputies have taken part in this discussion from all sides of the House and their approach has been in some instances very different. I want first to express our appreciation of the number of people who have taken part, whether they took part against us or with us, because by and large most of them dealt with it in a very calm and constructive way. Unfortunately, I must except from that statement the speech of the Minister for Finance. We all hope that he will soon be recovered from his illness and personally I would prefer that he were sufficiently recovered to be here to-night, so that he would hear what I am going to say about him and his approach to this Bill. It is unfortunate for him personally that he is laid up and I hope he will be back again soon. When he does come back I hope he will take advantage of the opportunity to read some of the speeches of some of his own back benchers and the more reasoned criticisms that came from them. I would be ungenerous also if I did not say that we appreciate the constructive line taken by Deputy S. Flanagan last night; I do not agree with all that he said just as he does not agree with all that we say, but he did approach this matter in a constructive way. The same applies to Deputy Colley in the earlier stages of his contribution, though I differ from some of the opinions he expressed; nevertheless he did try to consider the problem on its merits and see what solutions could be found.
This is by no means a new problem. It is not a problem that was hurriedly considered by our Party. This Bill was not produced in a hurry. When our Party gave us directions to go into the matter and when we were considering the problem, there weretwo ways in which we could have brought it to the attention of the House. We could have dealt with it by means of a motion but it was inevitable that a motion would not pinpoint the difficulties and that we would not be able by means of a motion to offer any constructive solution to some of our difficulties. We decided, therefore, to do it by way of a Bill because we felt that in that way we would at least be putting some of our proposals before the House in a concrete and constructive form.
We did not think for one moment that the Bill we would produce would be the be-all or the end-all of the matter. Private Deputies have not got anything like the advice and facilities available to Governments and for that reason they are not in a position to see all the implications and ramifications of the proposals that may be put forward.
We fully realised that because of that disability we might be told that some of our proposals had not been examined home in the way in which they could be examined home by a Minister with all the resources of the Civil Service behind him. But we did think it was at any rate worthwhile. We still think it was worthwhile to come to the House with these proposals, partial though they may be in respect of one section of what is an extremely complicated code.
I was very amused in the earlier stages of this debate to hear Deputy Briscoe—I think he was the first speaker on the other side—say that the type of Bill he wanted dealing with this matter was an extremely simple Bill and, subsequently, to hear the Minister for Finance in the next few minutes say that this was a most complex code and that the matter could not be dealt with in a simple fashion. I think that was about the only remark made by the Minister for Finance with which I was able to agree completely.
The valuation code is a most complex one and it is one which it is difficult to deal with without all the resources that are available normally at any time to a Minister. Before one considers any question of revision ofthe code, it is necessary, first of all, to clear one's mind as to the approach from the local authority point of view. There are two approaches in every local authority problem; there is the short-term view and there is the long-term view. The short-term view is typified by the speech we had last night from Deputy Allen. It is his view that members of a local authority should seize any and every opportunity to get as much as they possibly can through valuations being raised as often as they can. It would be necessary for me, perhaps, to deal with that approach of his in greater detail were it not for the speech that followed from Deputy S. Flanagan; he made the true position quite clear.
The long-term approach in relation to the problems of a local authority is, we suggest, the approach that should be adopted as regards the aspect of this problem that we have put before the House in this Bill. I, indeed, suggest that that is the approach that should be taken to all the problems that come before a local authority. As individuals we may be here only for a short time. County councillors are in the same position. A local authority has to go on and the affairs of a county have to be considered on a much wider basis than a short-term basis.
If a local authority sets out deliberately to encourage development and to encourage building, then obviously that encouragement will show results in the form of revenue at a later date. Speaking as a member of a local authority I suggest to the House that to grant a remission of rates for a short period is a small price to pay if, by doing so, modern buildings will be erected which, in turn, will produce revenue over a long period of time.
That viewpoint is not now being put forward by this Party for the first time. In the original Local Government Act passed after the foundation of this State provision was made for the remission of rates on business premises under Section 69 of the Act of 1925. That provision was not exclusively restrictedto a remission on residential premises and I think it was re-enacted and continued in Section 12 of the Local Government Act, 1927.
As far as I can remember the first time that the restrictive scope of remissions was introduced was in the Local Government (Remission of Rates) Act, 1940. The whole basis of those earlier remissions was that by encouraging building the result would be that in the long run we would not merely be able to modernise our buildings and develop our towns but, in addition, it would have the effect of ultimately bringing to the local authority more revenue arising out of the new buildings that had been erected. Some three and a half years ago when one of the annual renewal Bills was before the House I endeavoured to bring an amendment that would extend the scope of that Bill to include business premises.
My amendment was ruled out of order on the grounds that it would extend the scope of the Bill. Nevertheless, there was a certain amount of discussion on it, and anyone who is interested can see the viewpoint that was put forward on behalf of our Party on the 8th March, 1950.
The objection that was put forward at that time seemed to us a valid objection for the time being. The objection was that materials for building were in short supply, that it was still necessary to ensure that all the available materials would be utilised in building homes for our people rather than that there should be widespread encouragement to build business premises. When that point of view was put forward we agreed that it was better to defer that encouragement, because at that time the question was how best to control the volume of material available so as to ensure that it would be put to the best possible use.
For the last 12 months at least, that position has altered. For the last 12 months and more there has been an ample supply of all materials required for building of every type and kind; there has been an ample supply of skilled labour—not merely has there been an ample supply of skilled labour over and above what was needed forbuilding homes for the people but, unfortunately, a large volume of that skilled labour has been unemployed and has been forced in some cases to emigrate in search of employment.
In those circumstances it seemed to us that the position which operated in 1950 no longer operated and that it was essential to do something which would encourage and urge people to modernise and improve their premises, both from the point of view of the employment thus created and the point of view of the long-term benefit to various local authorities in whose areas the buildings are situate.
No matter on what side of the House he is, no Deputy will deny that it is absolutely desirable in the present position to take every possible step to encourage building, no matter of what kind, so long as it will be useful to the community in the long run. Such encouragement will assist in the creation of employment and will therefore help the general economy of the country. That view being universally held, it is unnecessary for me to stress that aspect of the situation further. If we embark on a policy of inducement, the revenue of local authorities will increase and they will derive that revenue in a way that will make it easier on those who have to pay it. Therefore, I would strongly urge the House not to adopt the short-term view, the hand-to-mouth view that was urged here by Deputy Allen last night. Not merely will it not solve any valuation problem or solve the problems of the local authorities but rather will it make them increasingly difficult every year.
Having accepted the position that it was desirable that something should be done to create that urge, we wanted at the same time to try to do away with one of the difficulties and one of the injustices that, I am sure, has been brought to the attention of almost every Deputy.
As I said a moment ago, the question of valuations is a complex one. When I say that it is difficult for us to understand how valuations are fixed, I do not suggest for one moment that the Commissioner of Valuation and his staff are fixing valuations other than in accordance with the law, but I dosuggest that the law is so complex that it is difficult sometimes for people to understand it. I suggest further, that valuations, being fixed in accordance with the law, it is nonsensical for Deputies to suggest that the fact that there is only a small number of appeals against valuations is a sign that everybody is quite happy about them.
Obviously, when a person receives a notice of an increase in valuation if, indeed, he gets it within the 28 days provided for appeal, he must consider whether the increase in valuation was made in accordance with the law. If it was, it is quite useless and a waste of money to appeal against it. I am surprised that certain Deputies who take every opportunity of having a crack at the lawyers should have been the Deputies who would state that the fact that there was such a small proportion of appeals meant that everybody was satisfied. What it did mean was that people felt that the valuation may have been fixed in accordance with the law, that the law was unfair and should be varied.
It is because we felt that the law should be varied that we brought this Bill to the House. Time after time people who have made small additions to their business premises and who budgeted for an increase in valuation of £2 or £3 having regard to the size of the addition, found, when the valuation of the holding was revised, that it was not the valuation of the addition that was considered but the valuation of the entire premises. We found more and more resentment throughout the country on the part of people who had made an attempt to modernise their premises, whether they were small premises or not, against the manner in which the valuations had been increased out of all possible proportion. That resentment had become so great, with the rates at the figure they are at to-day, that it was beginning to act as a very strong deterrent from the carrying out of any type of improvement or extension.
I quite understand, and I think it is fair, when a person builds on an addition to his business premises, that that addition should be valued. It is a building that has been put there fora purpose and it is only right that an estimate should be made of the improvement or the value of that building but I do not think that it is right or that it makes for progress that when a small addition is added to a business premises of any sort the valuation authorities should take advantage of that, particularly—as indeed they are entitled under the law so to do—to go in and revalue the entire premises. That is a method of getting piecemeal revision which is objectionable and unjust, and which more than anything else will stand as a bar and act as a deterrent to progress.
We had during the course of this discussion some considerable debate as to the manner in which valuations are struck. As I understand the position —and I do not pose at all as being an expert on it—there are three bases on which valuations can be determined: the letting value, which is simple enough when the property is let or when it is capable of being let; the contractor's value, which is, I understand, taken by arriving at the capital cost and taking a fixed percentage of that capital cost; or the profit basis, which, of course, is arrived at by estimating what profit can be made out of the particular building that may be there. Exactly how those methods are put into operation is a problem that has defeated many people who have studied all the Acts and who have made an attempt to investigate as fully as they can.
The figures that come to us from the Valuation Office are largely a question of opinion. Leaving out purely values for rateable purposes, if anybody asks for a valuation of a farm before they decide that they want to sell it, or if a valuation of it has to be made for probate purposes, it is always in the long run a matter of two people's opinion. One person will have a lower opinion than the other. Usually in a probate case the auctioneer or the valuer who has been asked on behalf of the estate to suggest what his opinion is will be lower than the official figure; but it is always a matter of opinion. While it would bedesirable, if we could, to get this whole question and problem of valuation out of the realm of opinion it is difficult to see how it could be done. I merely mention that in passing because of the suggestion that was made from time to time on the other side of the House that it was desirable to shelve the particular aspect of the problem that we have put into this Bill until there had been a new conception of value introduced. A new conception would be entirely desirable. If one could find that conception it would probably save many people headaches, but I do not see that that conception can be got in any reasonable time. If it cannot be got in any reasonable time, surely it is better to endeavour to remedy some of the injustices that exist at present without waiting to be able to make a perfect job of the whole thing. After all, in any walk of life if we are going to wait until we can get a perfect solution it will usually mean that we will wait until we will never get any solution at all.
This Bill, therefore, does not attempt to deal with every aspect of the problem. It only attempts to deal with certain limited aspects. It does not deal with private houses because those are covered by the 1940 Act. which is automatically renewed every year. While in its primary wording in the Long Title it deals with business premises and certain farm buildings, yet we deliberately included in the end of the Long Title the phrase, "to amend the law generally relating to the revision of valuations". We did not restrict, as we might have restricted, that final phrase in the Long Title to business premises and farm buildings such as are mentioned in Sections 3 and 4 of the Bill. We wanted deliberately when we were phrasing the Long Title of the Bill to leave it in such a way that on the Committee Stage, if it were not killed by the Government before then, any and every suggestion that might be coming from any side of the House in regard to valuations would be in order under the phraseology of the Long Title.
So far as we were concerned we felt that it was undesirable to havethe piecemeal type of revaluation that has been going on for some years. Some Deputies with whom I have been discussing that problem agreed with that point of view but felt that it was unfair to stop that piecemeal revaluation to-day, and that we should go back and make the Bill retrospective from any particular date that the particular Deputy had in mind. There was an instance of piecemeal revaluation to some extent in the town of Buncrana in Donegal, I believe, some little time ago. I heard something about that. It might be felt that by stabilising valuations now, as Section 2 of this Bill provides, it would be unfair where piecemeal valuation had already taken place.
I do not think that view can hold water, because we must always make a start at some point of time. There will always be hard cases and hardships, no matter when one makes the law operative, with a commencing day. The fact that it might not deal with injustices that have already taken place is surely no argument to prevent one now bringing in a measure that will prevent further injustices of the same nature taking place in the future.
Under Section 2 of this Bill we suggest that unless a building is improved or enlarged or unless a new building is erected the valuation of the holding should not be increased. There is, of course, no power except in very limited instances such as coast erosion and so forth, to change the valuation of land. Therefore, any question of changing valuations really applies only to buildings. I heard the Minister for Finance making a case here on the second day that this Bill was before the House that it was possible for a person to go into a private house and without making any improvement to it at all or any enlargement of it to convert it into substantial, satisfactory and almost luxurious offices.
Of course, anybody who knows anything about Dublin business premises knows that that is not true. He mentioned premises in Merrion Square. Often and often I have had occasion to go into premises in Merrion Square thatwere once private houses and that are now being used as offices. I venture to say that if the Parliamentary Secretary and I took a stroll round the square some day, and went into any house that he or I might choose, we would find that in 99 cases out of 100 there had been structural alterations. It stands to reason that the structure that is satisfactory for a private house —particularly for a private house of that type—is entirely unsatisfactory for an office building. Therefore, I think we may take it that when the Minister for Finance was saying that under Section 2, people could change a house from a private dwelling-house into an office without spending anything —without, to use his own words, "even using a pot of paint"—it was one of these far-fetched flights of fancy to which we have often listened from that particular Minister. It was one of these far-fetched flights of fancy of which he, with the undoubted powers which he has as an orator, likes to avail himself but which we all know have no relation to the ordinary hard and practical things we meet in everyday life.
Why should the owner of a building that has not been improved or enlarged suddenly find himself faced with a very substantial addition on his overheads, not merely in rates but in income-tax —which, of course, is assessed and based on the valuation of the building —and in E.S.B. charges which, likewise, are based on the valuation. If the premises happen to be a licensed premises there is an additional tax on the licence duty that is payable out of it.
These are four separate impositions and they are four separate sources of revenue. It is for that reason, and only for that reason, that we had the impassioned oration by the Minister for Finance when he spoke on the Second Reading of this Bill but never spoke about the Bill at all.
If it had any inherent defect of its own then we would have been entitled to hear from the Minister some reasoned analysis of the provisions of the Bill and some reasoned analysis of the objections which he saw to it. The Minister confined himself to a flowery political diatribe, interspersed now andagain with personalities about Deputy O'Higgins, Deputy Morrissey and occasionally even about myself. That is not the approach that the country wants to this problem of valuations. I know that the Minister's approach is that there should be a general revaluation all over the country. As far as I can gather, that is the approach of certain other Deputies who have already spoken in this debate. I think it was the approach that was indicated by Deputy Allen when he was speaking here last night.
Theoretically, if a valuation of, say, £12,000 in a particular town, where a rate of, say, 30/- in the £ brings in a sum of £18,000, is increased overnight to £18,000 then, theoretically, a rate of only £1 in the £ should be needed to meet the services in the town. But we all know perfectly well that one of the real brakes on unnecessary extravagance and unnecessary spending by local authorities is the fact that we consider the figure of the rate that is being struck in the £ too high and that if that figure were brought down, on an increased valuation to bring in the same amount of revenue, there would not be the same curb on rate assessment that there is at the present moment. It is, if you like, a psychological problem. It is not a mathematical problem. Mathematically, it should be exactly the same. But there is more than that to it.
The effect of a general uplift in the way that has been suggested as the solution for our valuation problem by the Minister and by other Deputies would also have the effect of increasing electricity charges, of increasing income-tax charges and of increasing licence duty charges, to mention four aspects of it that readily come to my mind. Naturally enough, I suppose that, in these circumstances, Ministers for Finance will shrink from the problem. But shrinking from the problem and making a political diatribe about it will not ultimately bring us nearer to a solution of the problem. I think it is fair and reasonable that we should agree that it is improper that one particular house in any street should bepicked out by the local authority and, having been picked out by the local authority, sent forward for revision of valuation without the adjoining house in exactly the same position being so sent forward. We were told by some people in the course of this debate— and, of course, they were right—that the principle of taxation was to ensure that it would be just all round. Is it a just principle of taxation for an authority to be in a position to say, in regard to two absolutely identical and equal premises in every respect, that they will send one of these premises forward for valuation revision, with the consequent increase that is inevitable thereupon, and that they will not send the other forward? Could any of us who brought it down to that close analysis accept the proposition that that is just or proper?
Section 2 of this Bill endeavours to provide that where work is not done on existing premises, where they are not improved or enlarged, the valuation will be kept at the present figure. It does not, as I heard Deputies suggest, state that the valuation must be kept to the same figure where improvement work or enlargement has been carried out or where, by structural alterations, the premises are made suitable for another user. Where these premises are structurally improved, or extended, or enlarged, it is clearly provided that the valuation can be increased in respect of that improvement, but we do say that, particularly at the present time, it is essential that every possible inducement should be given towards the employment of men, towards new buildings, towards modernisation of our buildings, many of which are now becoming far too old and are getting worn out.
It is because we feel that inducement should be there that we have provided the method suggested in Section 3.
We suggest in that section, in the first place, that, when an addition is placed on a building, it is the value of that addition that should be considered for the new valuation. The fact that some small addition is made to a particular business premises does not justify the old premises as well as the new being revalued and the valuationsubstantially increased, with a resultant addition to the overheads on each of the four bases I have mentioned. We suggest, too, that with the aim and object of improving the revenue of local authorities, taking a long term view, a further inducement should be given to people to modernise and improve their premises in the form of a remission of rates on the addition over the first seven years. That period of seven years is the period already operative in relation to residential premises under the Act of 1940, and it is because that period is enshrined in that Act that we suggest a similar period here. Whatever we do, it would be desirable so far as possible to simplify it by making the two run side by side in the matter of terms, so that people will know and understand readily what period of remission they will get.
We have heard suggestions in regard to Section 4 that it was entirely unnecessary and was already the law. What the law is in regard to the revaluation of farm buildings—not using that term in the sense of residences— has been shrouded in mystery for some little time. We were approached by a deputation from an association of certain farmers who gave us facts and cases where farmers had added a new bay to a hay-barn, had increased the size of a cowshed, had made an addition to a barn and so on, and in all cases there had been a revaluation and, in addition, they did not get a remission of rates for any period. When those cases were brought to our notice —it was not a matter of a single case but of many cases—we were bound to assume that there was some deficiency in the existing law which some people believed did grant that type of building a remission of rates, and, to put the matter beyond yea or nay, that aspect has been included in Section 4.
One of the greatest barriers to our agricultural production is that we have not got adequate farm buildings on our farms. Surely it is worth while doing everything we possibly can, not merely by means of grants under the farm building scheme, but by means of easing the load in respect of valuation, for the purpose of encouragingfarmers to improve their buildings and, with improved buildings, to bring about increased production. We are often told that in Holland and Denmark they are getting ahead with agricultural production to a much better and much greater degree than we are. The Minister for Agriculture recently paid a visit to these two countries, and anyone who has been through Holland and Denmark must agree that the one thing that stands out, the one thing that strikes the traveller in the eye, is the fact that their farm buildings for their stock and for their grain are infinitely better on the average than ours.
If we are to say we want to improve our agricultural production, to bring it to the pitch to which we all believe it can be brought, we must remember that the best way of doing it is to improve the buildings on the farms. Many people will agree that, so far as the winterage of our cattle is concerned, we feed them on the dearest food of all—their own fat and their own flesh —because we have not got proper houses in which to accommodate them against the rigours of a winter's night.
We all agree that we must deal with that problem, and is it not better to be certain beyond question in respect of the buildings around a farm that they will get the inducement that a remission of rates and a stabilisation of valuation will bring rather than that we should merely push that section aside because the Minister for Finance wants to be somewhat clever at our expense?
This section provides, in respect of farm buildings, just the same easement as Section 3 provides in respect of business premises. If a man has a three-bay hay-barn at the moment which has a certain valuation on it, and if he adds a fourth bay, as the law stands, the whole shed will be revalued and the whole valuation increased. We provide in this section that that cannot happen, that all that can occur is that the additional bay, and only the additional bay, can be valued and that it is only in respect of that addition the new valuation will be placed upon the building in question. It is exactlythe same principle as we suggest for business premises—that where a small improvement is carried out, it should not be the excuse for an overwhelming impost being placed on the building there already.
There is no use in our endeavouring, on the one hand, by grants under the farm building scheme, by verbal urgings from Ministers, Deputies and everyone else, to get farmers to improve their buildings and, at the same time, whenever a farmer does improve his premises, hitting him as hard as we can with an increase in his valuation.
When that has been done once or twice in a parish and news of it gets around, we know only too well what the effect of it will be—that no one else in that parish will go in for the same sort of improvement. That, very shortly, is our aim in introducing this Bill.
We do not suggest for one minute that it is perfect. As I say, we quite deliberately introduced into the Long Title of the Bill the last phrase: "to amend the law relating to revision of valuations generally", so that the Committee Stage could be as wide as anyone would wish. But we did bring in the Bill because we felt that there is an essential need at the present time to do everything possible to urge and encourage people to modernise their premises. Whether by reason of the hygiene regulations or for any other reason, the modernisation of business premises is a thing that all of us would wish to see if the country is to improve and go ahead as we would desire. We are all agreed on the necessity for the encouragement of agricultural production. We should also, I suggest, be all agreed on the necessity for the provisions introduced in Section 4 of this Bill. Every one of us who is a member of a local authority at the present time knows and understands these problems. It is not merely those who are in this House who are faced with these problems. When I say "understands the problem" I mean acquainted with the problems, because the problems are sometimes difficult to understand to the full.
Everybody will agree that there is universal dissatisfaction throughout the country in regard to the valuation code, a dissatisfaction which must be remedied in some shape or form. The problems with which we are endeavouring to deal in this Bill are, we suggest, the source of the worst forms of that dissatisfaction—the method by which, because a local authority arbitrarily decides that a particular building should be revalued, that building is selected and sent forward for revaluation although a neighbouring building may not be so sent forward; the method by which, when small structural alterations are made, these structural alterations are seized upon as an excuse for putting an intolerable rate on the building as a whole; the method by virtue of which a man, having improved his land to carry ten cows instead of six, and then extends his cow-barn to provide for the additional four cows, he is hit with a new and additional imposition. That is not the way to secure progress; that is not the way in which the local authority can ultimately get its revenue most satisfactorily. The way in which the local authority can get its revenue most satisfactorily is to encourage enterprise and the erection and modernisation of building by every means in its power The most beneficial and efficacious method, the one that operates most in people's minds, is to ensure that for the first few years after the additional expense has been incurred, there shall be a remission of the annual burden so that the business will be enabled to stand on its feet. In that way we shall ultimately secure a greater revenue for local authorities.
