asked the Minister for Local Government whether he is aware that persons who contracted with the Cork County Council for loans under the Small Dwellings Acquisition Acts at an interest rate of 5 per cent. and in whose mortgages or deeds of charge 5 per cent. was set out as the rate of interest, without any provision for a variation of such rate, are now being asked by the county council to alter the mortgage or deed of charge to provide for a payment of 5¾ per cent. interest, and that the Cork County Council has indicated to such persons that, if they do not agree to the increased rate of interest, they cannot receive loans at the old rate of 5 per cent.; and, if so, whether he has sanctioned this action by the county council, and if he will make a statement on the matter.
Ceisteanna—Questions. Oral Answers. - Cork County Council Housing Loans.
The county council are the authority responsible for fixing the rate of interest on advances made by them under the Small Dwellings Acquisition Acts. My sanction is not required.
Is the Minister aware that persons affected by the action of the council are people who had already signed contracts for loans at the rate of interest of 5 per cent. and that, as a result of whatever transpired in the Minister's Department because of the change in the rate of interest, the county solicitor sent to each of these people a letter saying that a change had occurred in the rate of interest and asking them to sign a document agreeing to the variation in the rate of interest? Will the Minister agree that is a very great hardship?
I should like to support Deputy Lynch and have the Minister indicate clearly that, where such firm mortgages were executed without qualification at the earlier rate of interest——
I do not propose to dictate to Cork County Council what rate of interest they should charge. I have no function whatsoever, other than to see that the terms of Section 40 of the Housing (Amendment) Act of 1948 are carried out. That section sets out:—
"The rate of interest on advances under Section 1 of the Act of 1889, shall, as regards any advance made after the passing of this Act, be a rate of not more than one half of one per centum per annum in excess of the rate of interest at which the local authority borrowed the money for the purpose of making the advance.”
I have no other function in the matter. I have no intention of dictating to the Cork County Council or to any other local authority.
The Minister has already indicated that, where a firm mortgage was executed at the earlier rate and where there was no qualification in that mortgage, he felt there could be no dispute about the validity of the contract——
I have no recollection of having made any such statement. I am stating now that it is entirely a matter for the local authority to fix the rate of interest, provided they comply with Section 40 of the Housing (Amendment) Act of 1948. I do not wish to express any view, in my capacity as Minister, as to the validity of the contracts entered into. I take it that both the applicants and the local authorities have legal advisers and I would strongly advise them to consult those people.
It is true I think there has been an attempt by the local authority to do an injustice to the various contractors and you have already said in this House that you thought——
The Deputy should not address the Minister directly.
I am asking the Minister to remember that he has already stated in the House that where such contracts have been executed at the firm rate, without any qualification in the contract, the people who made the contracts had a right that could not be denied.
Does the Minister not agree it is inequitable that, where portion of these loans has been paid and the balance due over a year or more, the new rate of interest should be charged on that balance?
Why should I be asked for my view when I have no function? Why not pose that question to the local authority? I have already said I do not wish to express a view here. Deputy Barry mentioned that where contracts were entered into, if there is no variation clause, these people should consult their legal advisers. I am not going to give legal advice in this House either to applicants or local authorities. There are paid professional men for that. Let both sides consult those legal advisers. I will express no view as to the attitude of the local authority.
Will the Minister agree that the statutory provisions had already been complied with when the rate of interest was fixed at 5 per cent., and will the Minister further agree that the only means these people have now of enforcing that rate of 5 per cent. is by way of legal action? They have sufficient burdens already without chancing anything from £50 to £100 in a legal action.
The Deputy will appreciate he is asking me to give judgment on something which he says is problematical. The Deputy does not say they have a good cause of action. He is asking me to decide what he himself knows in his capacity as a well known lawyer.